Facility utilisation

Drawn balance over committed limit per credit facility, trended over four quarters. Persistently low with a commitment fee is a customer paying for unused capacity; persistently high with growing revenue is a customer about to need more; high with shrinking revenue is a credit question.

DefinitionDrawn balance over committed limit per credit facility, trended over four quarters. Persistently low with a commitment fee is a customer paying for unused capacity; persistently high with growing revenue is a customer about to need more; high with shrinking revenue is a credit question.

Read with revenue

Growth and distress look the same at 90 percent drawn.

Fees on undrawn

The number the customer will notice at renewal, and a competitor will quote against.

How it is computed

Drawn balance divided by committed limit, per facility, tracked over four quarters.

Example

A $10 million revolver has been drawn at under 5 percent for a year while the client's turnover grew. The bank holds capital against a line the client does not need, or has replaced elsewhere.

Where it goes wrong

Looked at only at annual review, by credit. The relationship manager learns the client refinanced when the cancellation arrives.

Articles that use this term

Territory, capacity and quota planning · Commercial banking

Facility utilisation: committed lines drawn against limits, and what it says about the relationship

How a commercial bank reads utilisation of its committed credit facilities per customer from the facility register and the balance file: drawn against limit, the trend over four quarters, the customers at persistently low utilisation paying commitment fees on lines they do not use, the customers near the limit who will ask for more or go elsewhere, and the relationship reading each pattern supports.

16 Sept 20263 min read Alternatives and comparisons · Commercial banking

How to choose analytics software for commercial banking: questions, data and traps

How commercial banks should choose analytics software: start from the questions, check the data you hold, ask vendors ten questions, avoid the traps.

24 Sept 20264 min read Board and management reporting · Commercial banking

Relationship KPIs for commercial banking: ten measures that matter, each with its formula and the export it comes from

The ten relationship KPIs a commercial bank should run on, each with its formula, the export it comes from and what it tells you: products held against the sector norm, lending-only relationships, deposit flight, facility utilisation, share of wallet by product, relationship manager coverage at cadence, referrals between business lines, return per relationship, portfolio load against capacity, and primary bank indicators. Also the three measures most commercial banks miss, the figures to drop, the identities, and who owns what.

17 Sept 20264 min read