AMBIT RIsk & peRfoRMAnCe MAnAgeMenT

Ambit Credit Risk Management

SUNGARDS AMBIT CREDIT RISK MANAGEMENT

SunGards Ambit Credit Risk Management solution suite helps retail and commercial banks improve risk-adjusted profitability through better lending decisions, effective credit portfolio monitoring and management as well as efficient capital allocation while staying compliant with ever more stringent regulatory standards. It is comprised of category-leading software and specialized risk consulting which provides a standardized approach to assess customers creditworthiness, the ability to monitor credit portfolios with advanced risk analysis and stress testing and is able to deliver multidimensional analytic capabilities for margin and costs analysis and pricing.

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COMPREHENSIVE CREDIT RISK MANAGEMENT SOLUTION FOR RETAIL AND COMMERCIAL BANKS INDUSTRY OVERVIEW
Credit risk represents the most important risk every retail and commercial bank is exposed to and therefore requires the highest level of attention within a bank in order to maintain risk adjusted profitability. In fact, failure to do this was one of the leading triggers of the recent financial crisis and ultimately caused the demise of even the most seemingly infallible banking behemoths. At the same time, regulatory pressures on banks in the aftermath of this crisis are having a big impact on a banks ability to maintain risk adjusted profitability due to a host of factors including higher capital requirements and increased liquidity buffers, all of which add costs to a given transaction or relationship. Thus, in order to measure performance on a risk adjusted basis and keep the costs of regulatory pressures under control, it is imperative for a bank to not only assess the expected risk/ return profile of a transaction during its underwriting, but also to be able to analyze and manage the ongoing risk of its credit portfolio and determine the most efficient use of its capital. A bank also has to be mindful of the intellectual property held by its employees and put in place a plan for capturing that information and automating it for greater extensibility throughout the bank and beyond the tenure of the individual.

customers creditworthiness, provides the ability to monitor credit portfolios with advanced risk analysis and stress testing, running both regulatory and economic capital calculations, and is able to deliver multidimensional analytic capabilities for margin and costs analysis and pricing. Better Lending Decisions with Comprehensive Credit Assessment The diligent assessment of a potential creditor ultimately determines if and with what expected risk/return profile a transaction shall be entered into. It is therefore paramount to the banks future risk adjusted performance to run such assessment in a robust manner. sungards solution provides risk analysis, stress testing, risk appetite and limit setting, monitoring and provisioning which helps to increase accuracy in capturing financials of a potential creditor and drive efficiency in approval process by better pricing and predicting default and loss rates. Track Risk Exposure with In-Depth Portfolio Monitoring and Risk Analysis While credit assessment focuses around the single transaction and the closing of a single transaction, the credit portfolio management units ensure a balanced and well diversified credit portfolio. sungards solution provides the ability to identify weaknesses in portfolio composition, by geography, loan type, and address credit risk exposures.

THE SOLUTION
sungard can help. our Ambit Credit Risk Management solution suite is comprised of category-leading software and specialized risk consulting that helps commercial and retail banks increase their risk adjusted performance through better lending decisions with components for credit assessment, credit portfolio monitoring, capital management and profitability analysis. The solution suite offers a standardized approach to assess

It removes manual processes and provides capabilities for shock modeling and stress testing which helps to reduce costs and manage risk exposure. Improve Risk-Adjusted Performance by Efficient Capital & Profitability Management In the aftermath of this crisis, many factors including increasing regulatory pressures are having a big impact on a banks ability to maintain risk adjusted profitability. Therefore, it is more important than ever to assess and monitor the risk adjusted profitability within the institution on various dimensions to be able to react on profitability changes quickly. sungards solution provides an integrated view of regulatory and economic capital which helps to ensure that a banks capital position and planning is consistent with the overall risk profile and it also helps to create strategies to boost risk adjusted profitability.

solution suite achieves this through four main components Ambit Credit Assessment, Ambit Credit portfolio Monitoring, Ambit Capital Management and Ambit profitability Analysis. To address the unique requirements of every client, a customized solution around these four main components is delivered through a combination of standard software and specialized consulting services, thereby delivering a tailored and efficient work product. Ambit Credit Assessment sungards Ambit Credit Assessment solution provides a comprehensive and standardized approach for analyzing customer credit quality to facilitate loan approvals and ongoing credit compliance within the commercial lending book which helps Relationship Managers engage in more meaningful customer interactions and enables the bank to make better lending decisions. The solution provides capabilities for: Financial Analysis: provides a customer centric dashboard to analyze the financials of the potential creditor, improves credit transparency by better understanding customer exposures leading to reduced loss rates and capital costs. It also allows a more meaningful customer dialogue increasing customer satisfaction and retention. Credit Approval Process: Improves operational efficiency by using the streamlined processes which free up bank resources for more skilled work. Credit Compliance & Monitoring: provides extended covenant monitoring which helps banks to act early on warning signs, therefore increasing credit transparency and reducing losses. Facility Structuring: enables loan structuring and customers financials simulations under various business development assumptions which helps the bank structure the right loan for the customer, thereby increasing customer satisfaction.

SOLUTION COMPONENTS
The Ambit Credit Risk Management solution suite helps commercial and retail banks increase their risk adjusted performance through better lending decisions, effective credit portfolio monitoring and management as well as efficient capital allocation. This is all achieved while staying compliant with ever more stringent regulatory standards. The Ambit Credit Risk Management

 Risk Modeling: Assesses risk and forecasts future losses using the borrower, collateral and segment-specific risk rating models along with the macro-models, which helps to make better credit decisions and price the expected risk more accurately. Risk Adjusted Loan Pricing: Allows the bank to make sure that it is being compensated for the risk that it is assuming when it brings on different relationships on the books. The risk adjusted costs include expected loss and the cost of capital and therefore give the full risk picture enabling more informed lending decisions. Ambit Credit Portfolio Monitoring sungards Ambit Credit portfolio Monitoring solution provides advanced risk analysis, stress testing, risk appetite and limit setting, monitoring and provisioning to help Chief Credit officers and Chief Lending officers understand the impact of economic events or business decisions on their loan portfolio as well as on the single obligor. The solution provides capabilities for: Concentration risk analysis: Allows the bank to dig into its portfolios and analyze where it might have excessive exposures by providing powerful charts and graphics that identify loan concentrations by geography, industry or loan type levels. Watch lists: enables the bank to keep track of its most risky customers and to analyze how that pool of customers is changing on a month to month basis because the watch lists can be tailored to ensure transparency of all deteriorating credits, and those requiring remediation. Credit quality reporting: Allows the bank to get a window into the risk levels of customers that are currently performing and how those risk levels are changing over time.

Scenario Modeling: facilitates the analysis of the main drivers and sensitivities of the banks customers financials. This allows the bank to act as a partner with its customer in identifying ways that they can improve their business and thereby get more favorable pricing terms at origination or upon renewal. Risk Appetite & Limit Setting and Limit Monitoring: Allows the bank to define the amount of risk that the bank wants to take on as an organization. The bank can then set limits that are in line with this appetite. Limit monitoring enables the bank to make sure that it is staying within its risk appetite and that it does not bring undue concentrations onto the portfolio. Loss Provisioning: permits the bank to have a consistent approach to determine the reserves that it can easily justify to external constituencies including regulators and auditors. Ambit Capital Management sungards Ambit Capital Management solution provides Chief Risk officers, and compliance officers with an integrated view on regulatory and economic capital allowing them to more effectively manage the banks risks and capital under a variety of different stress scenarios. The solution provides capabilities for:

 Credit Risk: offers a selection of credit risk methodologies Credit Risk+, Credit Metrics and Credit Convergent to ensure an appropriate assessment of the banks credit risk within its various portfolios. Standardized and Internal Ratings Based approaches: provides both standardized and internal ratings based approaches which allow for accurate estimates of capital requirements that are more sensitive to the riskiness of the banks portfolio. Regulatory Reports: generates inputs for regulatory reporting and internal MI reporting requirements and includes standard reports for key regulators such as CRD, fsA and CBRC that help a bank to increase accuracy and efficiency in regulatory reporting and at the same time reduce the costs of reconciliation efforts. Risk Aggregation: provides a single consolidated view of the banks risks and allows the banks risk committees and decision makers to make informed business decisions on how to allocate capital to increase the banks risk adjusted profitability. Capital Allocation: Allows the bank to drive down the overall capital requirements to the transaction level so that the bank can appropriately include the cost of capital into pricing decisions and profitability assessments. By allocating the capital requirements back down to the counterparty level, it allows the bank to make counterparty level decisions such as setting limits and loan approvals. ICAAP Framework & Calculations: offers a comprehensive framework for complying with each local regulatory requirement for ICAAp submissions, especially pillar II risks, with widely accepted calculation approaches. BenefITsAs banks come under increased scrutiny, it is imperative that there is an overall internal framework for managing the banks risk, as opposed to the silo approach of the past.

Ambit Profitability Analysis sungards Ambit profitability Analysis solution provides margin analysis, cost allocation, cost of capital and loan pricing to help the Chief financial officer and the Chief Risk officer to identify important trends or relationships, to discover whats driving (or hindering) the profitability of products, customers or operating units and monitor and analyze the organizations risk adjusted profitability in order to make informed decisions. The solution provides capabilities for: Margin Analysis: enables the bank to assess the product margins and separates these from the banks income through term mismatch management. knowing what products are the most profitable ones enables the bank to channel marketing and distribution efforts most efficiently. Cost Allocation: provides the efficient use of expensive production factors such as personnel, IT, floor space etc. by assigning costs from cost pools based on cost drivers. This way of adequate and fair cost allocation increases the internal appreciation for the banks spending and therefore makes people cost conscious. Cost of Capital: facilitates the bank to incorporate risk costs into its overall profitability analysis. The solution examines the amount of shareholder equity that needs to be allocated to each transaction and its cost. This helps banks understand what products or customers are the most capital intensive and then appropriately channel capital to products, customer groups, branches and geographies where it generates best return. Loan Pricing: Allows the bank to price a new loan taking into consideration the existing client relationship as well as the current market environment. Therefore the banks risk adjusted margin for new business can be increased.

THE WELL MANAGED BANK

The financial crisis led to the realization that banks need a prudent, long-term balanced view of their business. As the global economy begins its recovery, banking leaders are refocusing on their core business principles; theyve recognized that their sustainability is provided by their customers; that their business operations rely on the expertise of their staff, however much this is leveraged with technology; and that their capital represents their ability to survive into the future. The key therefore, is to ensure that these three assets are managed in a balanced, risk adverse and profit focused manner. sungard can help. sungards Ambit banking solution suite helps retail, corporate and private banks to better manage their customers, staff and capital. We work with over 800 customers in over 70 countries, providing services and solutions to help them retain and acquire customers, achieve dynamic staff efficiency and effectively measure and allocate their capital.

STABILITY IN TOUGH ECONOMIC TIMES

sungard is one of the worlds leading software and IT services companies with more than 25,000 customers in more than 70 countries, including the worlds 25 largest financial services companies. With annual revenue exceeding Us$5 billion, sungard is ranked 380 on the fortune 500 and is the largest privately held business software and services company on the forbes list of private businesses. Based on information compiled by Datamonitor*, sungard is the third largest provider of business applications software after oracle and sAp. *January 2009 Technology Vendors financial Database Tracker www.datamonitor.com for more information please e-mail us at ambitinfo@sungard.com or visit our website at www.sungard.com/ambit

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www.sungard.com/ambit

For more information, contact us at ambitinfo@sungard.com Americas Boston, MA Calabasas, CA parsippany, nJ new York, nY sao paolo, Brazil stamford, CT Western Europe Antwerp, Belgium frankfurt, germany geneva, switzerland London, Uk Luxembourg Mechelen, Belgium Milan, Italy paris, france surrey, Uk Winterthur, switzerland Zurich, switzerland Eastern Europe Bratislava, slovakia Middle East Dubai, United Arab emirates Asia Bangkok, Thailand Beijing, China Hanoi, Vietnam Hong kong, China kuala Lumpur, Malaysia Manila, philippines seoul, south korea shanghai, China shenzhen, China singapore Taipei, Taiwan Tokyo, Japan karachi, pakistan Australia/New Zealand Melbourne, Australia perth, Australia sydney, Australia Christchurch, new Zealand

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