Flush with Cash?
|Is your bank looking to build stronger customer relationships without adding to its balance sheet? Is it trying to manage interest-rate risk by extending liabilities and locking in long-term funding at today's low rates? If so, one or more of Promontory Interfinancial Network's solutions for highly liquid banks may be a good fit for your institution.
||Is your bank seeing an increase in deposit competition and qualified loan applications and wondering if its funding needs will increase? Is it looking to lower funding costs or to diversify funding options? If so, one of Promontory Interfinancial Network's many choices for low-cost, short- or long-term funding may be right for your bank. The company offers numerous, million-and-billion-dollar funding options, each available without collateralization. In addition, it offers deposit services that attract stable funding and valuable relationships.|
ICS® and CDARS® enable banks to offer multi-million-dollar FDIC insurance on funds placed in demand deposit accounts and/or money market deposit accounts (through ICS) and in CDs (through CDARS). With ICS One-Way Sell and CDARS One-Way Sell, your bank can sell excess customer funds (just the excess funds, not the relationships) to other Promontory Network members for a fee. If your bank’s liquidity position changes, it can bring funds back on balance sheet—through ICS Reciprocal or CDARS Reciprocal—all without affecting the customer relationship. (A new law provides that most reciprocal deposits are no longer brokered. This presents an enhanced opportunity to use ICS and CDARS Reciprocal to grow nonbrokered deposits.)
With Promnet Repo, banks can offer large-dollar customers—such as corporations, financial institutions, and public funds—valuable benefits, while moving billions of dollars of unwanted deposits off balance sheet. Customers can enjoy the security of having their funds backed by U.S. Treasuries or by Agency MBS. Banks of all sizes can benefit from the balance sheet flexibility afforded by Promnet Repo and the ability to offer customers a wider array cash management services. Also, banks affected by Liquidity Coverage Ratio calculations can avoid having to retain deposits that are negatively impacted by these calculations under new regulations.
With Yankee Sweep, banks can offer sophisticated customers the potential to place their funds at U.S. branches of select non-U.S. banking organizations, providing these valued customers with an alternative option for their cash balances that may achieve a higher level of return. Although these deposits are uninsured, they are placed with U.S.-chartered branches of foreign banks that are subject to Federal Reserve Board regulation and have international credit ratings. Banks that use Yankee Sweep can sell excess liquidity and earn noninterest income.
Promontory Interfinancial Network’s large-dollar funding options offer terms ranging from 4 weeks to 7 years that do not require collateralization. With ICS® One-Way Buy®, CDARS® One-Way Buy®, and CDARS® Floating-Rate FundingSM transactions, a Promontory Network member can buy funds from other members that wish to sell excess deposits (just the funding, not the relationships) and earn fee income. With IND, funding comes from cash in brokerage firm customer accounts. The Yankee Sweep service provides participating U.S. branches of non-U.S. banking organizations with access to funding in terms from 1 to 5 years at variable rates, helping them to manage liquidity.
Promontory Interfinancial Network’s CDARS and ICS offer differentiated benefits that appeal to valuable customer segments and can result in stable funding. Safety-conscious customers of all types, including businesses, nonprofits, public entities, and other large-dollar depositors, appreciate the peace of mind that comes with the access to multi-million-dollar FDIC insurance offered by ICS and CDARS.
Banks can encourage existing customers to consolidate their deposits as well as attract to new, large-dollar, loyal relationships. As an example, CDARS holdings reinvest at a rate of approximately 80%.
Learn more about how Promontory Interfinancial Network's services can give your bank more flexibility to manage its balance sheet in almost any market condition by visiting our product-specific web pages—ICS, CDARS, IND, Yankee Sweep, and Promnet Repo—or by contacting us.
The Promnet Repo service is provided by Assetpoint Financial, LLC, a wholly owned subsidiary of Promontory Interfinancial Network, LLC, and a member of FINRA and SIPC. Use of the Promnet Repo service is subject to the terms, conditions, and disclosures set forth in the applicable agreements, including the Promnet Repo Service Agreement. Assetpoint Financial, LLC does not purchase or sell any securities in connection with repurchase agreement transactions effected using the Promnet Repo service. Funds invested in repurchase agreement transactions are not FDIC insured.