Objectives On completion of this tutorial, you will be able to:

• Identify the various sources of income for banks and the main factors affecting loan pricing and revenue
• Recognize the importance of measuring risk-adjusted returns and why they are more meaningful at a portfolio level than a customer level

Tutorial Overview Banks are in business in order to generate returns for their stakeholders. To achieve this, they must take risks and embed them in the products and services they provide. This tutorial describes the various sources of revenue for banks, including both interest and noninterest income. It looks in detail at the factors influencing loan pricing, in addition to calculations for relationship earnings, risk-adjusted earnings, and return on capital employed (ROCE). Prerequisite Knowledge Credit Risk Management - Credit Culture Tutorial Level: Intermediate Tutorial Duration: 60 minutes