A new benchmarking tool for the banking sector.
“How does my bank compare to others?” This is one of the more commonly asked questions when KPMG member firms meet with banks to talk about Supervision. Banks across Europe want to know where they stand among their peers. Since the start of the ECB Supervision under the Single Supervisory Mechanism (SSM), bank management have struggled to respond to the ECB as a new supervisor – many wondering how they compared to their peers also under the Supervision of the ECB. To help answer this key question, KPMG’s ECB Office has developed KPMG Peer Bank, a new benchmarking tool that is designed to go beyond transparency to deliver comparative peer-to-peer insights for banks.
In November, the European Banking Authority (EBA) published the outcome of its 2015 EU-wide transparency exercise, providing detailed bank-by-bank data on capital positions, risk exposure amounts and asset quality on 105 banks from 21 countries of the European Economic Area, yielding over 100,000 different data points.
However, to do any real peer-to-peer comparison, banks and analysts had to do some analysis; and to compare a bank or a group of banks to national or European averages was an even bigger task. KPMG’s ECB Office saw this as an opportunity and developed a new platform for the banking industry.
The KPMG Peer Bank tool brings banks an opportunity to see where they stand against their peers: regionally, nationally, and by peer groups.
The benefits of benchmarking aren’t just for commercial and competitive analysis. The EBA SREP Guidelines confirm that the benchmark is a meaningful supervisory tool. A bank can count on the ECB to use benchmarks to determine its position relative to their peers. For example, a bank’s Preliminary Quantitative Rating is a key input in supervisory decision making and is used in three of the four SREP blocks.
Flexible Peer Grouping: Users may create their own peer group whenever they use KPMG Peer Bank. A user may define a peer group using his or her own criteria or by using recommendations provided by KPMG, for example by business model.
Ratios and indicators benchmarking: Users have the option to customize their own benchmark settings, in addition to the pre-set country benchmarks or from among nearly 100 ratios that KPMG have defined based on available information. New custom ratios can be defined on the available data. Users can compare information against the EU average, country average, and peer group average; and may also obtain a percentile ranking with respect to their peer group (including, but not limited to: NPL Ratio, Forbearance ratio, Coverage ratio, Level of Collateralization, ROA, Cost to Income, RER, CET1, Leverage ratio).
Data export and delivery: Benchmarks data can be exported to a compatible spreadsheet format (such as to Microsoft ® Excel ®) for further analyses or reuse in reports and databases.1
Advanced analytics and trend analysis: Advanced analytics capabilities will guide the user through Tail Analyses to show where each bank stands among its peers for each financial indicator; Trend Analyses of the financial indicators and ratios’ time series; Clustering Analyses to define new views of the Banks’ business model categorizations; and Correlation Analyses that highlight the most important KPIs for a given bank’s cluster.
Beyond transparency: As supervisors forge ahead with transparency, KPMG Peer Bank will be updated with the latest published data from stress testing and transparency exercises to provide the latest information and benchmarks available.2
The tool’s responsive interface allows users to customize their experience within the tool and to access the tool from mobile devices.
The reactive architecture adapts the interface to data changes without the need of user intervention.
Our analytics platform is capable of real-time analyses enriching business analyses and bringing additional insights to your work.
1Microsoft, Excel, MSN, and Windows are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries.
2KPMG will select data based on relevance to the overall market and EBA and ECB activity.