Český finanční a účetní časopis 2011(2):82-92 | DOI: 10.18267/j.cfuc.107

The Importance of Risk for measurement of profitability of products and customers - inspiration from banking industry

Petr Vacek1, Libuše Šoljaková2
1 Ing. Petr Vacek - doktorand; Katedra manažerského účetnictví, Fakulta financí a účetnictví, Vysoká škola ekonomická v Praze, nám. W. Churchilla 4, 130 67 Praha 3, Email: <petr.vacek@seznam.cz>.
2 Doc. Ing. Libuše Šoljaková, PhD. - docentka; Katedra manažerského účetnictví, Fakulta financí a účetnictví, Vysoká škola ekonomická v Praze, nám. W. Churchilla 4, 130 67 Praha 3; <soljak@vse.cz >.

This article treats the possibilities of including of risk into appraisal of complex gain of customers and the way which the banks use. It shows the calculation of expected loss and economic capital. It points out their usage in the financial management of the bank and the ways of preliminary and quasi-final profitability measurement using RAROC ratio. In the last section there is the case-study that shows its calculation and the impact of real changes of important parameters as rating or utilization of the facility.

Keywords: Risk costs; Cost allocation; RAROC; Customer profitability.
JEL classification: G21, M49

Published: June 1, 2011  Show citation

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Vacek, P., & Šoljaková, L. (2011). The Importance of Risk for measurement of profitability of products and customers - inspiration from banking industry. Czech Financial and Accounting Journal, 2011(2), 82-92. doi: 10.18267/j.cfuc.107
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    References

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