SOURCE: Kamakura Corporation

Kamakura Corporation

February 04, 2016 21:00 ET

E.Sun Commercial Bank Ltd., Taiwan, Implements Kamakura Corporation Suite of Solutions for Funds Transfer Pricing

NEW YORK, NY--(Marketwired - February 04, 2016) - Kamakura Corporation reported Thursday that it has implemented the Kamakura Corporation suite of solutions for E.Sun Commercial Bank, Ltd., Taiwan (https://www.esunfhc.com.tw/) ("E.SUN"), one of the largest banks in Taiwan in terms of both asset size and profitability.

In 1989, a group of elite professionals joined under the leadership of chairman Mr. Yung-Jen Huang, who pledged to attain the summit and pursue to be the best. In 1992, E.SUN Commercial Bank was born to realize these high ideals to become a first-class bank. The passage of the Financial Holding Company Law in 2001 paved the way for the birth of E.SUN Financial Holding Company Ltd, on January 28, 2002, marking the beginning of new era for E.SUN. Since the beginning E.SUN has demonstrated a consistent commitment to its brand name and pursuit of total quality management and service.

E.SUN provides various commercial banking products and services. The company accepts deposits; and engages in lending, discounting of bills/checks, domestic remittances, commercial acceptances, issuance of letters of credit, guarantees, custodian services and warehousing, rental of safe deposit boxes, and credit card operations. It also offers foreign exchange services, including general inward and outward remittance, foreign currency deposits, foreign currency loans, foreign currency guarantees, and exchange of foreign cash and travelers' checks, as well as import and export negotiation.

Following a comprehensive evaluation exercise involving a complete proof of concept, E.Sun selected Kamakura to implement an integrated solution of balance sheet management and funds transfer pricing. The project comprised software implementation, subject-matter consulting, and the development of reports addressing the requirements from both executive management and regulatory perspectives.

Suresh Sankaran, Chief Risk Officer of Kamakura Corporation stated, "E.SUN is a very advanced bank, always ahead of its peers in innovative risk management information process implementations, and their selection and implementation of Kamakura after a comprehensive vendor evaluation proves that organizations seek modular and integrated solutions wherever possible in order to minimize the use of disparate systems. This project will result in a very accurate assessment of the margins of the business units within the bank, and the fact that these can be modified based on different market scenarios means that the organization is prepared for any adverse movements in market conditions."

Mr. Lu-Ell Chuang, Manager of E.SUN FHC Headquarters Division and Performance Measurement Improvement Team, said Thursday, "The successful selection of the Kamakura suite of funds transfer pricing solutions is not just due to the professional approach adopted by Kamakura Corporation, but on the bank understanding the immense need for subject-matter expertise that is available with Kamakura's consulting personnel. Our selection was based on the fact that the transfer pricing exercise can be done at user-defined intervals, and can be processed across multiple servers, using several CPUs, resulting in high performance, and availability of executive results at the transaction level."

Further, "The transfer pricing solution provides advanced FTP metrics like liquidity premiums and discounts, customer optionality, core and non-core balances, locked margins across tenors, and transfer pricing adjustments based on user-defined parameters. The transfer pricing process is not just historical but also forward-looking, which gives us insights into forecasted margins, and aligning our budgets and forecasts with the estimated cost and value of funds. The transfer pricing process clearly differentiates between contractual cashflows and behavioral patterns, making it easy to understand the cost of embedded options.

"E.SUN's selection of the Kamakura Funds Transfer Pricing and relevant reporting structures underpinning the solution was based on a very competitive process. The Kamakura consulting team is exceedingly professional and courteous, and our history with them indicates that they adopt a 'no surprises' approach, which means that both the bank and the vendor are abreast of all developments during the implementation. We look forward to working closely with Kamakura Corporation to further refine our risk structures and processes in the not-too-distant future."

Dr. Clement Ooi, SVP & Managing Director, ASPAC, stated, "E.SUN has selected an integrated, holistic computation engine, and this certainly will be the platform upon which the bank will build its integrated risk framework. With this implementation, E.SUN Bank is uniquely positioned to be fully aware of its business unit, product, and customer profitability. The bank will generate cashflow information at the transaction level, and the results of the transfer pricing process will also be used in their net income simulation and stress testing endeavor."

Mr. Chuang stated, "The Kamakura Funds Transfer Pricing solution will be used for computing liquidity premiums and discounts along with the standard pricing framework, and this will ensure that our economic profits are in line with reality and business units will be insulated from risks other than their core competence. This will mean a practice that is transparent and seamless from a business unit, product, and customer perspective. It will also give us a good insight into transaction level economic profit and value that management can utilize to optimize returns."

Martin Zorn, President and COO for Kamakura Corporation, said Thursday, "The successful implementation of the funds transfer pricing project in E.SUN Bank is important not just from the perspective of margin management but also from the context of measuring, managing and controlling integrated risk. The fact that we are involved in similar projects not just in Taiwan but across the region as well as globally is a great plus for Kamakura, and is testimony to the credentials of Kamakura's subject matter experts. Kamakura is well-positioned to meet the burgeoning regulatory demands imposed on financial institutions in the region and has the wherewithal to keep pace with regulation and compliance and as a matter of fact, many of the newly introduced regulatory requirements have been available to users of Kamakura Risk Manager for many years."

To follow risk commentary by Kamakura on a daily basis, please follow Kamakura CEO Dr. Donald van Deventer (www.twitter.com/dvandeventer), Kamakura President Martin Zorn (www.twitter.com/riskmgrhi), Kamakura Chief Risk Officer Suresh Sankaran (www.twitter.com/sureshkamakura) and Kamakura's official twitter account (www.twitter.com/KamakuraCo).

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