Commercial banking: Analyse your commercial property portfolio

How did XDI help?

XDI conducted an analysis of each individual asset. The analysis incorporated outputs under a range of climate scenarios and accommodated a range of asset types using XDI’s library of archetypes.

XDI worked with the bank to solve a number of data quality and geocoding challenges, delivering 100% coverage of the nominated assets.

The bank was then able to use XDI’s web-based, self-service platform - the Climate Risk Hub. . The platform delivered results quickly in a data spreadsheet format (CSV) to allow portfolio risk teams to conduct further credit analysis, and in a PDF report with key findings ready for presentation to Boards and committees.

Results

Metrics provided to the client included:

• Maximum-to-Date Value at Risk
• Technical Insurance Premium
• Climate Adjusted Value
• Productivity Loss
• Failure Probability
• Primary hazards driving risk

The Productivity Loss metric was used to calculate impairments to the income earning capacity of the asset, and Climate Adjusted Value was calculated to assess damage to collateral. Taken together, the outputs supported in-depth PD and LGD assessments.

What next?

The analysis allowed the bank to understand what hazards were most responsible for driving the risk profile to the asset and to form a view of credit risk at an asset level. The results could be extended as a basis for client engagement via customer relationship management teams to discuss climate resilience strategies for high risk properties.

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