6商业银行管理(罗斯).pptx

CHAPTER SIX MANAGING AND PRICING DEPOSIT SERVICESKey topicsTypes of Deposit Accounts OfferedThe Changing Mix of Deposits and Deposit CostsPricing Deposit Services and Deposit Interest RatesConditional Deposit PricingRules for Deposit Insurance CoverageDisclosure of Deposit TermsLifeline BankingTypes of Deposits Offered by BanksTransaction (Payments) Deposits: An Account Used Primarily to Make Payments for Purchases of Goods and Services.Noninterest-Bearing Demand DepositsInterest-Bearing Demand Deposits a. NOW Accounts b. Money Market Deposit Accounts (MMDAs) c. Super NOWsNon-transaction (Savings or Thrift) Deposits: An Account Whose Primary Purpose is to Encourage the Bank Customer to Save Rather than Make Payments. a. Passbook Savings Deposits b. Statement Savings Deposits c. Time Deposits d. Individual Retirement Accounts (IRAs) e. Keogh Plans f. Roth IRAsCore DepositsCore deposits are the most stable components of a depositary institutions funding base and usually include smaller-denomination savings, time deposits, as well as checking account. They are characterized by relatively low interest-rate elasticity. Holding a substantial proportion of core deposits has an advantage in having access to a stable and cheaper source of funding with relatively low interest-rate risk.Interest Rates Offered on Different Types of DepositsInterest Rates on Deposits Depend On:The Maturity of the DepositThe Size of the Offering BankThe Risk of the Offering Bank Marketing Philosophy and Goals of the Offering BankPricing Deposit-Related ServicesPricing Deposits at Cost Plus Profit MarginUsing Marginal Cost to Set Interest Rates on DepositsConditional PricingPricing Deposits Based on the Total Customer RelationshipPricing Deposits at Cost Plus Profit MarginCost-plus deposit pricing encourages banks to determine what costs they are incurring in labor and management time, materials, etc., in offering each deposit service. Cost-plus pricing generally calls for a bank to charge deposit service fees adequate to cover all the costs of offering the service plus a small margin for profit.For ExampleA bank determines from an analysis of its cost-accounting figures that for each $500 minimum-balance checking account it sells account processing and other operating costs will average $4.87 per month and overhead expenses will run an average of $1.21 per month. The bank hopes to achieve a profit margin over these particular costs of 10 percent of total monthly costs. What monthly fee should the bank charge a customer who opens one of these checking accounts?Unit Price Operating Overhead PlannedCharged= Expense+ Expense+ Profit Marginper Month Per Unit Per Unit Per UnitThe relevant formula is:In this case: Unit Price Charged Per Month = $4.87 + $1.21 + 0.10 x ($4.87 + $1.21) = $6.69 Using Marginal Cost to Set Interest Rates on DepositsMany Financial Analysts Argue That the Added Cost (Not Weighted Average Cost) of Bringing New Funds into the Bank Should Be Used to Price Deposits.Marginal cost = Change in total cost = New interest rate Total funds raised at new rate Old interest rate Total funds raised at old rateMarginal cost rate = Change in total cost / Additional funds raisedFOR EXAMPLE5%6%7%8%9%10%11%12%255075100125ACMCMR(AR)Conditional PricingConditional pricing is a tool used by banks to attract the kinds of depositors they want to have as customers. With this pricing technique a bank will post a schedule of offered interest rates or fees assessed for deposits of varying sizes and based on account activity. Fees Paid by the Customer Depend Mainly Upon:The Number of Transactions Passing Through the Account.The Average Balance Held Over Some Designated Period.The Maturity of the Deposit in Days, Weeks , Months, or Years.Three broad categories: (1)flat-rate pricing; (2) free pricing; (3) conditionally free pricing.For ExampleRelationship PricingThe Bank Prices Deposits According to the Number of Services Purchased or Used. The Customer May Be Granted Lower Fees or Have Some Fees Waived If Two or More Services are Used.Basic or Lifeline BankingSome People Feel That All Individuals Are Entitled to a Minimum Level of Financial Services No Matter Their Income Level.HomeworkslKey wordslTransaction deposit, nontransaction depositlNO.4lNO.5lNO.6