FI-Sim | Transaction Banking

Operating Deposits

$350B

Class 1-2 Operational: $220B (63%)

Payment Volume

285K

txns/day | 5 corridors

Trade Book

$85B

LC $25B | Guar $20B | SCF $15B

Fee Income

$4.2B

/yr | +6% YoY

NII (Deposits)

$3.8B

/yr | weighted beta 0.18

Network Value

$2.1B

120 correspondents | 45 corridors

Deposit Franchise Composition

Class	Balance ($B)	LCR Outflow	Beta	NII ($B/yr)
Class 1 Operational (clearing)	120	25%	0.05	1.80
Class 2 Operational (cash mgmt)	100	25%	0.10	1.20
Class 3 Non-operational	80	40%	0.35	0.60
Class 4 FI Unstable	50	100%	0.60	0.20
Total	350	38% wtd	0.18 wtd	3.80

Key: 63% of deposits are operational (Class 1-2), with weighted LCR outflow 25% and blended beta 0.07. These are among the stickiest, lowest-cost liabilities on the balance sheet. Class 4 FI unstable ($50B) is the primary run-risk pocket.

Payment Corridors

Corridor	Vol/day	Fee ($M/yr)	STP	Cost ($M/yr)
Domestic low-value	180K	450	99%	120
Domestic RTGS	5K	380	98%	85
Cross-border G10	12K	920	92%	280
Cross-border EM	8K	1,150	78%	450
On-us / internal	80K	120	99.9%	30
Total	285K	3,020	93% wtd	965

Margin: Cross-border EM is the highest-margin corridor ($1,150M fee on 8K vol/day) but also highest cost ($450M) with lowest STP (78%). Automation investment has highest payoff here.

Trade Finance Portfolio

Instrument	O/S ($B)	CCF	Rev ($M/yr)	EL (bps)
Documentary LC	25	20%	280	8
Standby LC / Guarantee	20	50%	320	12
Financial Guarantee	5	100%	150	15
Supply Chain Finance	15	40%	210	6
Receivables Finance	10	75%	180	10
Other	10	50%	120	8
Total	85	43% wtd	1,260	9 wtd

Benchmark: Aggregate EL of 9bps is within the ICC Trade Register range (5-15bps). SCF at 6bps is the lowest-risk, highest-growth segment. Financial guarantees (15bps) warrant individual name monitoring.

Securities Services

Metric	Value	Note
Assets under Custody	$2.5T	Global programme
Equities	$1,000B (40%)	DM + EM listed
Fixed Income	$875B (35%)	Govt + IG credit
Alternatives	$375B (15%)	PE, RE, Infra, HF
Other	$250B (10%)	Cash, FX, MMF
Custody Revenue	$850M/yr	~3.4bps blended
Settlement Fail Rate	0.8%	Target <1.0%
OpRisk Charge	$12M/yr	BIA methodology

Scale economics: At $2.5T AuC, blended fee of 3.4bps is competitive with BNY ($47T, ~2.5bps) and State Street ($42T, ~2.8bps). Alternatives (15% of AuC) generate ~40% of fee margin.

Correspondent Banking Network

Attribute	Value
Respondent Banks	120
Currency Corridors	45
Clearing Memberships	8 (USD, EUR, GBP, JPY, CHF, HKD, SGD, AUD)
Network Value (Metcalfe)	$2.1B
De-risking Probability	2.3% wtd avg
Nostro Balances	$18B optimised
AML/KYC Refresh Cycle	12 months
ISO 20022 Adoption	68% of corridors

Network moat: Metcalfe-type value ($2.1B) scales as ~N*log(N) with respondent count. Each clearing membership unlocks 5-8 corridor pairs. De-risking risk concentrated in 3 EM corridors (weighted 8.2% vs 2.3% portfolio average).

Client RAROC Heatmap — Top 15

#	Client	Segment	Wallet ($M)	RAROC	Status

Action: 3 clients below 13% hurdle rate flagged for repricing. Aggregate wallet at risk: $78M. Cross-selling securities services to sub-hurdle payment clients lifts RAROC by 200-400bps on average.

Portfolio Optimisation Signal

Binding Constraint: Operational Capacity (85% utilised)

Shadow prices indicate operations capacity is the tightest constraint at $0.15/unit, exceeding balance sheet $0.12/unit and capital $0.08/unit.

This means an incremental unit of ops capacity generates more marginal revenue than an equivalent unit of balance sheet or capital. Investment priority should flow to automation and STP uplift.

Recommendation

1. Grow cross-border EM corridor — +$2B capacity release via STP automation (78% → 90% target). Unlocks ~$180M incremental fee income.
2. Reprice 3 sub-hurdle clients — aggregate wallet $78M, target RAROC 13%+ or managed exit.
3. Expand SCF programme — lowest EL (6bps), highest client stickiness, +$5B addressable within existing credit appetite.