FinCity Investment Advisory > Our Services > Asset and Liability Management (ALM) and Portfolio Management Advisory

Asset and Liability Management (ALM)
and Portfolio Management advisory

Balance sheet management is critical to the proper functioning of a financial institution. We work with financial institutions to address and manage various forms of balance sheet stress to ensure sound balance sheet management and to boost financial performance. This requires an integrated approach to Asset and Liability Management.

Financial institutions that have existing or future liabilities/ pseudo liabilities need to ensure that the right kind of investments are in place (relative to the liabilities) to cater for these obligations when they fall due. Also, in an asset-only framework, sound asset allocation is critical to meeting financial goals.

Given the huge untapped potential of Funds Transfer Pricing – FTP, FinCity is very keen to work with financial institutions where applicable, to implement robust FTP schemes. FTP can be a very valuable tool for allocating the cost of balance sheet stress to internal units, managing risks (ensuring that risks – such as credit risk, interest rate risk, and liquidity risk reside with entities/units that can manage them more effectively), as well as ensuring that there is an objective, robust and fair framework for determining the performance of branches, products, business units, etc. It helps to ensure the proper allocation of net income amongst all relevant entities. If designed well, it should also provide the right incentives to turbocharge performance. We are primarily focused on:

  • Interest Rate Risk Management
  • Foreign Currency Risk Management
  • Liquidity and Liquidity risk management
  • Designing Hedging Strategies
  • Designing Funds Transfer Pricing Schemes
  • Designing Investment Policy Statements
  • Advising on Asset Allocation
  • Capital and Capital Adequacy Management