What s going on with FTP pricing within the bank?

Not from the financial management department, give it a try. First of all, there is a mistake in the description of the question, if the account manager of the branch absorbs a deposit, the external ** is 4%, and the ** of the head office treasurer is 3%, then the deposit is actually a loss of 1% when the assessment is calculated. However, in the actual business, although the deposit is lost, it has won a certain amount of loans, increased its market share, and completed the deposit target.

Back to the question, if the bank adopts the full FTP pricing management model, then each fund will have a corresponding ** according to the currency, term, and different **, in fact, not only the deposit and borrowing of funds have a corresponding **, but also the use of fixed assets. What you said, the financial market department or the interbank department to get a project, need 500 million funds, in the final analysis, or to borrow money from the treasurer to use, branches and departments do not have their own funds to invest, unless to take business expenses (that is impossible), the absorption of interbank funds directly to another project, bypassing the treasury is impossible, although this is the same department to operate the business, but to calculate the profit separately. FTP pricing management not only undertakes the function of depositing and borrowing funds, but also guides business development through the pricing of funds, and at the same time transfers interest rate risk to the treasurer of the head office.

In addition, as far as the unit I work for is concerned, there is no such thing as "bank-owned investment", and they are all allocated to specific business lines to operate, such as interbank and capital pools, which are also business units, just like the retail department of the corporate department, and also abide by the principle of FTP pricing when calculating and assessing profits. On the surface, the peer department first absorbs funds when making orders, and then uses this part of the funds to invest in a certain product. In fact, the calculation of the assessed profit of these two businesses is separate, and both are the income after FTP (the same as the calculation of the assessed profit of the deposit loan).

It's just that the head office generally sets an upper limit on the asset-liability ratio of the business unit, so to increase the assets you have to expand the scale of your liabilities first, which looks like finding money first and then investing it. <>

Interest, FTP System Implementation Consultant & Data Engineer. Before this question, I was wondering who the subject was. FTP belongs to the category of management accounting, and the people you can meet are either banking companies, financial management companies, or people who make software for the banking industry like me.

So who can ask this question. Anyway, there is a chain of contempt in the field of fund transfer pricing, the program department of the consulting company ===" the implementation department of the software company === the business department of the bank. If you want to ask for this question, you must have someone from a consulting company or a software company to talk to you.

In response to the problem, I can make it clear to you that FTP is management accounting, and basically it does not have a direct impact on your business and does not add an operation to your business process, but through the FTP pricing scheme that has been set, the data is processed after the daily settlement, which is equivalent to a pure calculation process (of course, it also involves manual adjustments). There is a problem with the example in the first paragraph of the subject, the calculated deposit profit is negative, and there are very few negative numbers in the actual calculation (I haven't seen it anyway). <

I'm not doing this, try it. I remember that except for the general products such as the storage of the same industry, the rest are classified as "innovative interbank businesses", such as the listing of the Beijing Financial Exchange, all of which are subject to general FTP pricing, and the profits are attributed to the relevant sales department. Banks carry out FTP system pricing, and promote it layer by layer in the order of market-oriented business first, and then traditional deposit and loan business.

Generally, the first is the foreign exchange business, then the capital business, and finally the RMB deposit and loan business. Therefore, whether it is absorbing funds or using funds, FTP needs to be calculated. In order to win large customers and more market share in actual work, sometimes there will be a negative FTP assessment profit.

This only affects the efficiency assessment score of the branch, in order to improve the overall assessment score, some projects have negative FTP profits, and the bank will also do it. <>

FTP refers to an internal operation and management model in which the internal capital center of a commercial bank and its business operation unit transfer funds in full and for compensation in accordance with certain rules to achieve the purpose of accounting for the cost or benefit of business funds. The funds raised by each liability business of the business operation unit shall be transferred to the capital center in full with the FTP** of the business. The funds required for each asset business are purchased from the fund management department in full at the FTP** of the business.

FTP was born in the United States in the 1980s and was first adopted by Bank of America. It is only in the last few years that it has been transmitted to China and applied in the practice of banking management. Although FTP is an advanced management tool, there are prerequisites for its large-scale application, and its application in China is obviously constrained by the dual financial structure, encountering the quadruple constraints of the semi-market-oriented financial environment, the capital clearing and supervision system with the city as the main body, the bank management model with the block as the main body, and the decentralized bank risk management system, which is difficult to achieve the expected management purpose.

FTP is the abbreviation of Funds Transfer Pricing, which refers to internal fund transfer pricing, which is the funds obtained by the bank and branches borrowing money from or lending money to the head office. Banks rely mainly on the spread between issuing loans and issuing bonds (or taking deposits).

In order to improve the overall operational efficiency of the bank, the head office will issue bonds and dispatch funds, and the branches will lend loans, borrow money from the head office and absorb deposits.

Lent to the head office, the head office will allocate it uniformly. Since the branch borrows money from the head office and lends money to the head office, there are transactions between the head office and branches of the bank, and there is a transaction, and this is FTP. Extended Resources:

1. The role of the FTP system in the operation and management of commercial banks is mainly manifested in the four major merits: scientific evaluation of performance, optimization of resource allocation, guidance of product pricing and concentration of market risks.

The internal logic of their function is manifested in the fact that FTP provides the capital cost of each transaction.

Therefore, under the FTP management model, the bank can calculate its net interest income for each transaction. In this way, based on the underlying information of each transaction, the bank can measure its contribution to the overall net interest income of the bank by product, by department, by customer or by individual.

Apply these quantitative results to performance management.

Banks can use the net interest income earned by different assessment targets as an assessment indicator; Banks can use this as a basis to objectively compare the profitability of different products, so as to use limited resources to the most profitable products, customer groups or regions; Used in product pricing, account manager.

It can clearly quantify the capital cost or capital benefit of the business, so as to formulate a scientific pricing strategy on the basis of comprehensive consideration of cost factors and profit factors.

2. Under the management mode of FTP system, the capital center is responsible for managing the working capital of the whole bank.

Each business (business involving funds) handled by the business operation unit is required to transfer the full amount of funds to the capital center through FTP**. Specifically, the funds raised by each liability business of the business operation unit will be transferred to the fund shelter center in full with the FTP** of the business; The funds required for each asset business are purchased from the fund management department in full at the FTP** of the business. For asset business, FTP** represents its cost of capital, and the business operation unit needs to pay FTP interest; For the liability business, FTP represents its capital income, from which the business operation unit obtains FTP interest income.

FTP (Funds Transfer Pricing) is a means for the head office (branch) of a commercial bank to manage the market risk of its subordinate branches (sub-branches) in a unified manner. When a subordinate branch (sub-branch) receives a deposit, it needs to sell the full amount to the head office (branch) according to FTP** to earn the interest rate difference between FTP** and the deposit interest rate; When issuing a loan, it is also necessary to purchase the full amount from the capital center of the head office (branch) according to FTP** to earn the interest rate difference between the loan interest rate and FTP**. In this way, the original situation that the business operation unit will only "deposit and borrow" when there is a capital gap has been changed, and the head office and branch level can better manage and monitor the subordinate business operation units, and can be targeted.

Extended Information: What is FTP in Banking Finance?

FTP refers to an internal operation and management model in which the internal capital center (treasurer) of a commercial bank transfers the full amount of funds with the business department or branch in accordance with certain rules, aiming to achieve the purpose of accounting for the cost and income of funds. The funds raised by each liability business of the business operation unit shall be transferred to the capital center in full with the FTP** of the business unit; The funds required for each asset business are purchased from the fund management department in full at the FTP** of the business.

Difference fund management model, the branch's funds and the use of funds are first arranged and matched within the branch, and only the remaining part of the funds is exchanged with the head office through the upper deposit or lower loan, which corresponds to the interest rate of funds in the system, that is, the upper deposit and lower loan interest rate.

In the FTP model, all the funds** and capital use of the branch are transferred to the head office through FTP**, and each liability business of the branch sells the funds to the head office through FTP** and obtains the value of the funds from it; Each asset business is funded from the treasury of the head office through FTP**, and the cost of capital is paid at the same time.

After the implementation of full fund management, the internal current fund business such as handing over and depositing credit funds and depositing that existed under the balance fund management model no longer exists, and even if it exists, it will not be interest-bearing.

Bank FFTP: Bank FFTP refers to the internal operation and management mode of a commercial bank's internal capital center and business operation unit to transfer funds in full and for compensation in accordance with certain rules to achieve the purpose of accounting for the cost or income of business funds. The funds raised by each debt business or untraced business of the business operation unit shall be transferred to the capital center in full with the FTP** of the business consolidation; The funds required for each asset business are purchased from the fund management department in full at the FTP** of the business.

Internal fund transfer pricing (FTP) refers to an internal operation and management model in which the internal funds of a commercial bank are transferred in full and paid by the business operation unit in accordance with certain rules to achieve the purpose of accounting for the cost or benefit of business funds.

The funds raised by each liability business of the business operation unit shall be transferred to the capital center in full with the FTP** of the business. The funds required for each asset business are purchased from the fund management department in full at the FTP** of the business.

For asset business, FTP** represents its cost of capital and needs to pay FTP interest; For liability business, FTP represents its capital income, from which FTP interest income can be obtained.

Extended Content: Fixed income** is defined as cash flow that provides a fixed amount or is calculated according to a fixed formula. For example, the issuer of a corporate bond promises to pay a fixed amount of interest to the bondholder every year.

Some bonds have a floating interest rate, but there is also a clear calculation method. For example, a corporate bond is required to calculate and pay interest based on a two-percentage point increase in the interest rate of the Treasury bill.

The meaning of the silver balance macro line ftp popular book is erect.

ftp（funds

transfer

Pricing) is the internal fund transfer pricing, which is a means for the head office (branch) of a commercial bank to manage the market risk of its subordinate branch (Rangdong Branch) in a unified manner.

When a subordinate branch (sub-branch) receives a deposit, it needs to sell the full amount to the head office (branch) according to FTP** to earn the interest rate difference between FTP** and the deposit interest rate; When issuing a loan, you also need to purchase the full amount from the capital center of the head office (branch) according to FTP** to earn the interest rate difference between the loan rebate rate and FTP**.

In this way, the original situation that the business operation unit will only "deposit and borrow" when there is a capital gap has been changed, and the head office and branch level can better manage and supervise the subordinate business operation units, and can be targeted.

In the case of fund transfer pricing, through the establishment of a virtual capital pool, the bank uses a unified internal fund transfer to raise funds from the capital return department, and sells the funds to the fund application department, subdivides the income and expenditure of interest, gives full play to the leverage of interest rates, reflects the restrictive effect of efficient operation on each business unit, and gives full play to the maximum benefit of each department; It can also assist in the profitability analysis and performance assessment of various business units and organizations at all levels.

The net interest margin income of the bank's assets and liabilities business is divided into two parts: the net interest margin of the asset business and the net interest margin of the liability business.

The net interest margin of the asset business is equal to the interest income of the asset business minus the cost of capital. The net interest margin of the debt business is equal to the capital value of the debt business minus the interest cost.

In the general asset and liability business management model, the management department uses the method of net capital income and expenditure to manage the profit of funds. The net interest of each head office and branch is calculated according to the net difference between the deposit interest expense and the loan interest income of each head office and branch. However, this method cannot break down the value of funds obtained or the cost of funds paid for deposit and loan business, respectively.

The method of net fund difference is not to obtain the profit accounting of products and customers, nor can it distinguish between the profit generated by the asset and liability business. Therefore, it is recommended to use the method of virtual pooling to deal with the profitability analysis of products and customers, so as to more objectively evaluate the profitability of different dimensions.