Invictus Customized Bank Stress Testing and Strategic Planning

Invictus provides banks of all sizes with an integrated, forward-looking stress testing and strategic planning tools and advice. We work with your team to create a customized Stress Test, and pro forma Balance Sheet and Income Statement, incorporating your specific and proprietary information in combination with our own proprietary methodology and databases. The stress test is just the start -- it's the means to the end, which is a strategic plan for your bank.

Stress Testing -- it's the Means to the End

Since 2009 Invictus has created technology that stresses banks' loan portfolios and balance sheets and produces easy-to-understand output for bank management and Boards of Directors. Our technology:

  • uses either public data or private (loan-level, bank - supplied) data, or both;
  • has been used in more than 200 stress test and strategic planning board meetings;
  • has resulted in reduced capital requirements when used by our clients to "push back" on unsubstantiated regulatory requirements;
  • produces 2-year forward pro forma balance sheets under a selection of potential economic scenarios (including the Federal Reserve proscribed CCAR/DFAST scenarios), incorporating your strategic plans;
  • gives an early assessment of potential acquisition targets, and the results of a merger/takeover on your balance sheet;
  • gives powerful insights and comparisons to other banks in your market, your peers, or your acquisition targets;
  • is in a constantly evolving state as regulatory requirements, data accessibility and market practices change.

Engagement of Invictus is typically on a multi-year basis with quarterly reporting
to your senior management or board of directors.

Deliverables in a typical engagement:

  • Customized Invictus Bank Stress Test report incorporating three scenarios on a forward 2-year basis reflecting Adverse, Severely Adverse and Reverse Stress Test scenarios;
  • Competitive Invictus Bank Stress Tests on competitor banks, highlighting the issues confronting each;
  • A preliminary report analyzing your bank's post-stress position and outlining the market risk exposures and their expected impact on post-stress capital, earnings and other performance measures;
  • A report which identifies the key risks within the enterprise and loan portfolio, which can then be used to drive further risk management activities within the bank such as a targeted loan review.
  • Development (in collaboration with management) of contingency plans such as capital raises, expense optimization, asset sales/purchases, M&A, and shifts in asset-liability management. These plans are to ensure sufficient levels of capital and demonstrate proactive planning to regulators and other key stakeholder;
  • General strategic planning, particularly relevant for community banks that may lack the internal resources and the broad exposure that is required

Strategic planning -- presentation to your management and board

Following consultation with bank management on the above findings, Invictus will:

  • Prepare a written report of the findings, their implications, and identify potential strategies and actions for consideration;
  • Present the findings to the bank's board of directors;
  • Provide a written Stress Test report for the bank's regulators.

Look to the future

Invictus provides other services based on the outcome of the Invictus Bank Stress Test, depending on your needs:

  • Preparation of an enterprise valuation analysis suitable for presentation to potential investors;
  • Corporate finance and investment banking services including analyses of corporate restructuring, capital infusions, acquisitions and merged entity scenarios, and the structuring, negotiating and marketing of any potential transaction.
  • Advisory support and/or presentation materials to communicate the highlights and results of the customized stress test analysis to regulators, existing and potential investors and other audiences as required by the Bank.

Contact us to discuss your precise requirements.