Banks have been looking for opportunities to increase profitability in a variety of ways. Promontory’s services can help your bank to increase revenue and reduce collateral-management and funding costs.
Increase ROA by replacing collateral with higher-earning assets
Through ICS and CDARS, your bank can provide depositors with access to multi-million-dollar FDIC insurance on their deposits, thereby reducing the need to collateralize deposits on an ongoing basis. Doing so helps your bank to use the full amount of deposits for more profitable lending activities, reducing opportunity costs and boosting revenue potential.
Reduce burdens and costs associated with protecting customer deposits
By using ICS and/or CDARS to offer customers access to FDIC insurance on their large-dollar demand, savings, and CD deposits, your bank can reduce the administrative costs associated with managing more burdensome alternatives, such as repo sweeps and letters of credit.
Additionally, ICS is available for integration with most major banking system software packages.
Purchase cost-effective wholesale funding without collateralization or stock purchase requirements
Through ICS and CDARS, your bank can buy fixed- or floating-rate wholesale funding in amounts from under $1 million to a billion or more dollars and in a range of terms from 4 weeks up to 5 years.
Through IND®, your bank can access even larger blocks of cost-effective, floating-rate funding at terms ranging from 3 to 5 years and in amounts generally ranging from $25 million to multiple billions of dollars. The total all-in cost of funds can be locked in for up to 5 years, and it may be possible to extend or renegotiate IND pricing before the agreement expires.
Reduce customer acquisition and retention costs
Using ICS and/or CDARS, banks can attract and retain large-dollar depositors who generally have a lower cost-to-value ratio than other depositors. The average customer deposit placed through ICS and CDARS is $2.2 million and $2 million, respectively.1
Supplement nondeposit, wholesale funding with large-dollar demand, savings, and time deposits
Through ICS and CDARS, your bank can attract large-dollar demand and savings deposits from safety-conscious depositors, such as businesses, nonprofits, and public funds. ICS can be an essential service for depositors looking for secure cash-management options, while CDARS can meet customer needs for safe, longer-term time deposits.