CRE Concentration & Stress Testing demo
The CRE book tested against its limits and stress scenarios every month, loan by loan. 1:12
What the demo shows
A risk solution for banks that tests the CRE book against limits and stress scenarios.
Six agents read the month-end loan tape, capital, property financials and market data; a scenario board re-stresses every loan from its own rent roll and debt terms as cap rates, vacancy, rates and rents move, tests every concentration limit after the losses, runs the board's scenarios and drafts the write-up; the portfolio manager proposes actions and the Chief Credit Officer signs.
Transcript
- CRE Concentration & Stress Testing tests a bank's real estate book against its limits and stress scenarios, loan by loan.
- Most banks do this once a year.
- Here the book lives on one board.
- Office is 48% of capital against a limit of 50.
- Four sliders move the market, cap rates, vacancy, refinance rates and rents.
- Rene widens cap rates by 150 basis points.
- Office crosses its limit, and 23 more loans drop below one times.
- Each loan is re-stressed from its own rent roll and debt terms, so she sees exactly which ones break.
- She saves it into the write-up, beside the board's three scenarios.
- Martin signs concentration and stress results every month, not once a year.
- Built on Botminds: agents, data, screens, and governance on one platform.
Transcribed from the film’s narration. Captions are on the player.