Over the past four years banks have seen some of the strongest and weakest liquidity levels since 2002. As we all know, our balance sheets are not built to change direction on a dime, so, volatility of this level is extremely difficult to manage. To further complicate things, loan demand hasn’t exactly helped overall IRR positions. Many institutions saw strong demand for long-term fixed mortgages when interest rates were at their lowest. Now those same institutions see mostly shorter-term loan demand when they would rather lock in some of the current market’s yield. Then we need to factor in today’s ever-rising cost of funds, putting more pressure on liquidity and margins. All this combined is more than enough to challenge even the most experienced management teams.

However, what if you’re not using all the tools available to improve and stabilize your liquidity and performance? What if your loan portfolio could be managed with the same flexibility that many of you manage your investment portfolios? This is where loan trading and participations come into the strategic planning conversation. Many institutions consistently tweak their investment portfolios to improve alignment with the rest of the balance sheet, whether they are lengthening, shortening, or simply looking to increase yields. Loan trading can offer many of the same benefits, whether you are looking to improve performance, improve diversification, or even reduce IRR and liquidity pressures. When done correctly, the selling bank can retain the customer relationship while the buying bank gets the loans it wants without servicing requirements.

After attending this webinar, you will be able to: