Metro Bank PLC, Britain’s first new High Street bank in over 100 years, has selected SunGard’s Ambit Asset Liability Management (ALM) solution. To support its client service proposition, Metro Bank will use Ambit ALM to help it maximize its net interest income, by helping it ensure the accurate measurement and management of asset-liability gaps and basis risk during this period of low interest rates and acute margin compression.
Metro Bank will use Ambit ALM for static and dynamic asset-liability management, liquidity risk management and hedge accounting. Ambit ALM will help the bank perform multi-dimensional analysis of the balance sheet, run stress tests and create reports. Ambit ALM will also help the bank identify and simulate strategies that minimize the cost of and exposure to liquidity risk and achieve compliance with the new liquidity management regulations of UK’s Financial Services Authority (FSA). Ambit ALM’s hedge accounting functionality will help Metro Bank avoid undesirable volatility in earnings using micro fair value and portfolio fair value hedges.
Mike Brierley, chief financial officer at Metro Bank, said, “SunGard’s Ambit ALM will help us establish a strong foundation for liquidity and interest rate risk management so we can be prudent in our decision making, yet strategic for maximized returns. SunGard took a consultative approach to showcase the direct benefits of the solution by performing simulations using our own data. This convinced us that Ambit ALM closely met both our business and IT requirements.”
Andreas Hug, chief operating officer for SunGard’s Ambit Risk & Performance Management business unit, said, “As regulatory pressure continues to grow in this low interest rate and highly volatile environment, our customers are looking to manage liquidity risk and basis risk to help maximize interest income. SunGard’s Ambit ALM helps effectively measure and manage these risks, forecast balance sheet performance and meet regulatory requirements.”
