The Loan Pricing Model Based On Risk-Adjusted Return On Capital

When China accessions to WTO, the financial market opens up to the international gradually, and the market-oriented reform of interest rate is continuing. China's banking industry is starting to face a market environment of increasingly competitive, internal and external risks are continuing to strengthen and the capital market regulation is more stringent. The loan is the most important earning assets of bank, and loan pricing is also a hot issue in academia, so the research of loan pricing methods and techniques has a theoretical and practical significance. Pricing methods have a new development in recent years–RAROC pricing.RAROC pricing can achieve to customers with different risks have different prices, make price and risk achieve the match. It also can meet the requirement of bank optimizes loan customers and takes reasonable risks. The method overcomes many disadvantages of traditional pricing theories.The problem of loan pricing based on RAROC is the main content of this paper. The basic model is modified by credit risk and comprehensive customer return, and then solve the ignore problems of the transfer of credit rating changes and the overall relationship between banks and enterprises. It supplies a new of the loan pricing. The object of study is the simulate cases. Through the comprehensive comparison of the actual interest rate, the rate of the basic model and the rate of modified model, we find that the modified model performs best on loan rates. The interest rate can cover the bank risks, but also more easily accepted by customers. In the condition of the banking profit, the loan rate can enhance the bank's competitiveness and their market shares.