The IBM Cognos Relationship Pricing for Commercial Banking Blueprint offers commercial banks a performance management framework that enables relationship managers to efficiently model and price both credit and non-credit deal scenarios that are in line with corporate objectives. Managers can analyze proposed deals against a customer’s existing portfolio, giving them complete visibility into the customer’s total projected profitability and corresponding risk, making it easier to identify a deal price that will meet or exceed a bank’s defined earnings hurdle rates, and improve risk-adjusted return on capital.

“In this climate of economic uncertainty, punctuated by the recent sub-prime mortgage crisis, effective pricing of products and services for customers is critical. Competitive pricing, at the relationship level in particular, stimulates organic growth, drives new customer acquisition and cross-selling opportunities, and improves overall profitability and risk management,” said Patricia Hines, senior analyst, wholesale banking, at TowerGroup.

Combining out-of-the-box functionality from IBM Cognos 8 Planning and IBM Cognos 8 Business Intelligence (BI) software – including dashboards, analytical reports and a pre-configured data model – and encompassing banking industry best practices, the IBM Cognos Relationship Pricing for Commercial Banking Blueprint features:

* pricing capabilities for Credit and Treasury services
* deal and relationship profitability analysis capabilities for multiple pricing scenarios
* user-defined dashboards offering relationship managers book of business, profitability and proposal information to facilitate decision-making
* flexible dashboards offering executives high-level, up-to-date revenue, profitability and risk information across all portfolios
* centralized administration and integrated workflow to ensure consistency and accuracy across the loan pricing modeling, analysis and approvals process. This includes a pricing approvals form, displaying all of the deals that require approval and the high-level details of outstanding proposals

“Spreadsheet-based pricing models are ineffective because they cannot deliver holistic customer relationship information and insights which commercial bankers need to effectively price new business. These shortcomings are magnified given banks heightened focus on operational efficiencies and risk mitigation,” said Francis McKeon, banking industry director at Cognos. “The IBM Cognos Relationship Pricing for Commercial Banking Blueprint offers a consistent best practice risk-based pricing model where relationship managers can quickly evaluate new business pricing scenarios, measure their profitability and associated risk impact, then compare it against corporate hurdle rate targets. This assures executives that pricing deals are being developed in line with corporate goals, and can be easily adjusted as strategies change.”

Available immediately to customers, the IBM Cognos Relationship Pricing for Commercial Banking Blueprint is the fifth in a series of Banking Performance Blueprints launched by Cognos since 2006, including solutions for branch performance, corporate and retail banking customer segment performance, and risk-adjusted profitability. Cognos also offers a Performance Blueprint for insurance product profitability.

Cognos is a recognized leader in delivering performance management solutions for the banking industry. Over 1,000 financial services institutions worldwide use IBM Cognos solutions, including nine of the top 10 banks in Europe and all of the top 10 banks in the United States.

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Brent Erickson, executive vice president of the Biotechnology Industry Organization’s Industrial & Environmental Section, today stated, “A newly released economic analysis shows that oil prices and speculative investments by hedge funds in agricultural commodity futures are playing the largest role in driving up food costs.”

A new study recently released by the Agricultural & Food Policy Center at Texas A&M University demonstrates that higher energy costs and $100-per-barrel oil have had the most significant impact on food and grain prices by increasing the cost of production. It also shows that speculative investment activities have increased price volatility within grain markets, raising prices for food. Due to these factors, the analysis concludes, relaxing the new Renewable Fuel Standard and reducing production of biofuels would not lower grain prices. The study is available at: http://www.afpc.tamu.edu/pubs/2/515/RR-08-01.pdf.

The 2007 Renewable Fuel Standard caps conventional ethanol production at 15 billion gallons and requires the production and use of 21 billion gallons of advanced biofuels by 2022. The combined total of 36 billion gallons will amount to about 20 percent of U.S. transportation fuel needs. Next-generation biofuel technologies that use cellulosic feedstocks are currently being commercialized.

On April 18, U.S. Department of Energy Secretary Samuel Bodman announced selection of pilot projects for increasing production of advanced biofuels from paper pulp, switch grass and corn residue. The small-scale biorefinery projects will develop and test new conversion technologies that can be scaled up for increased production.

“These pilot projects will utilize the newest advances in biotechnology and help to make large-scale production of biofuel from non-food sources a near-term reality,” Erickson said. “With these three projects, there are now 29 advanced biofuel refineries planned or under construction. This continuing research and development is vital to meeting the Renewable Fuel Standard’s challenge for bringing increased amounts of advanced biofuels to American consumers over the next 15 years, which will help reduce the reliance on oil that is now, ironically, affecting food prices.”

The “Advanced Biofuels & Climate Change Information Center” presents the latest commentary and data on the environmental and other impacts of biofuel production. Drop in and add your comments, at http://biofuelsandclimate.wordpress.com/.

BIO represents more than 1,200 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products. BIO also produces the BIO International Convention, the world’s largest gathering of the biotechnology industry, along with industry-leading investor and partnering meetings held around the world.

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