We customize the analytics for each bank, marrying a top-down approach with bottom-up data that focuses on the core fundamentals of banking.
You see what you get. There is no black box you don’t understand. Our process is designed to provide management with full ownership and confidence in the analysis, without wasting their time.
Stress testing is the tool, not the job. We stress test the bank’s strategic plan, its policy limits, where it stands today and where it may be two years down the road. We show you the capital impact of every contemplated action.
We are not software vendors who give you a report and walk away. We provide expertise and leadership to the process, advising CEOs and boards on how to translate the analysis into actions that will increase profitability and shareholder value.
When our bank clients understand the strategic value they can get from the process, they view stress testing as an essential part of their management toolkit, not a regulatory expectation. This is what regulators want. It’s the ultimate secret when it comes to regulatory blessings for your strategic plans.
An example of a bank client freeing up nearly $51 million of capital using a BankGenome™ -powered stress test
The Invictus Stress Test provides a competitive advantage by quantifying how much capital a bank would need to withstand a severe economic recession, usually less than the regulatory “rule of thumb” requirement. All community banks should conduct a stress test before opting in to the new Community Bank Leverage Ratio framework, which will require a leverage ratio of more than 9 percent.
Note: FreeCapital™ is a trademarked calculation defined as reported capital less base capital less capital required for stress test.
Our bank clients have used our stress testing analyses to:
Our analytical techniques are validated through the key principles underlying CECL. That’s because our disruptive intelligence led us to develop our technology years before CECL was finalized.
We are the only firm that can provide banks with both a stress testing and CECL solution using the same system, which is critical to doing it right.
A complete stress test can be completed in as little as 3 weeks following receipt of critical loan-level information. Our goal is to help community banks quickly but properly diagnose the strengths and weaknesses of their balance sheet and their capital in the event of a recession.
The stress tests will answer these critical questions:
The Invictus COVID-19 stress tests utilize the Federal Reserve’s severely adverse case scenario as a starting point but are adjusted to reflect the reality of the coronavirus fallout. Features include enhanced stress on loans associated with affected industries, expected compression of the net interest margin due to the Fed’s zero interest-rate policy and quantitative easing, additional customization in collaboration with bank management, and more.
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