Blog · Wallet share and penetration · Commercial banking
How a commercial bank finds the borrowers who hold a loan and nothing else, from the loan book and the deposit and product ledgers joined on the customer identifier, values each by the deposits and fees similar full-relationship customers hold, ranks them per relationship manager, and separates the ones worth a conversation from the ones who bank elsewhere by design.
A commercial bank's loan book and its deposit ledger are two systems, two teams and, usually, two reports. Joined on the customer identifier, they show the borrowers to whom the bank has lent money and from whom it holds nothing else. This guide sets out the list, the value at norm, and the flags that keep the wrong customers off it.
Per customer:
Lending-only = has an active facility, and no operating account, no treasury product, no card, no deposit balance above a stated floor
Per relationship manager:
Lending-only customers, their exposure, and the value at norm
Customer identifiers only.
customers in the loan book ⊆ customers in the master
A borrower with no master record fails it, and is usually a facility booked to a group entity under a different identifier. Those are listed before the lending-only test runs, because they would otherwise appear as opportunities that are not.
Among borrowers in the same size band and sector who hold an operating account at the bank: the median deposit balance and the median annual fee income. Those two figures are the value at norm for a lending-only customer of that kind.
One relationship manager, this quarter.
| Customer | Sector | Size | Exposure | Origination | Deposits at norm | Fees at norm | Flag |
|---|---|---|---|---|---|---|---|
| 4471 | Manufacturing | Mid | $8.2m | Direct | $1.9m | $41,000 | |
| 2210 | Real estate | Mid | $12.0m | Syndicated participation | Excluded | ||
| 9034 | Wholesale | Small | $1.4m | Direct | $420,000 | $11,000 | |
| 1187 | Services | Mid | $5.5m | Acquired portfolio | $1.1m | $28,000 | Review |
Customer 4471 is a direct borrower of eight million dollars whose operating business banks elsewhere, and similar customers hold nearly two million in deposits here. Customer 2210 is a syndicate participation and is not a relationship at all. Customer 1187 came with an acquired book and may or may not be reachable; it is on the list with the flag.
Per relationship manager: the count, the exposure and the value at norm. Per region: the same. And the share of the loan book, by exposure, that is lending-only, trended. A bank whose lending-only share is rising is winning credit and losing relationships.
Loan book and deposits never joined. The two teams each report their own numbers and the gap between them is nobody's.
Group entities unmatched. The parent banks here and the subsidiary borrows; the subsidiary looks lending-only. The master's group structure is the fix.
Syndications counted. Half the list is participations. Flag by origination type.
Value from a benchmark. Somebody else's deposits-per-borrower. Use the bank's own full-relationship customers.
Mapped once, the loan book, the deposit ledger, the holdings and the master produce the list, the flags and the value at norm every quarter. Covirage builds this from the exports as they are. The commercial banking page describes the setup, and the cross-sell measurement guide covers the product-count measure this list is the sharpest case of.
Because the bank carries the credit risk and earns the margin, while the operating account, the deposits and the fees are at another bank. The borrower's primary bank has the relationship; this bank has the exposure.
From the bank's own customers: among borrowers of the same size band and sector who do hold an operating account, the median deposit balance and annual fee income. That figure, per lending-only customer, is the value at norm, labelled as such.
Participations in syndicated facilities, acquired loan portfolios, and facilities booked for a group entity whose operating business banks with the parent. Each is flagged from the loan record's origination type, and the report excludes them by default.