Launching the Brismo Loan Valuation Framework

Published on November 18, 2019

Brismo have created a framework to efficiently provide loan level valuations. This model is aimed at originators who may need to provide clients with an ongoing valuation of loans, or loan parts, for example to comply with FCA PS19/14.

This framework has been developed in collaboration with LendingCrowd as their procedures evolve to satisfy the latest regulatory requirements.

In addition to a transparent and intuitive methodology, our approach also introduces a level of independence to the risk management process which can reassure regulators and stakeholders.

Our framework combines two approaches:
1. A haircut matrix that combines expected recovery values across a spectrum of default probabilities
2. A 1 year forward valuation based on gross yields and loss rates

Originators can use these approaches in combination to arrive at a credible, independently verified, assessment of value for loans of any type, and at any status.

By applying a consistent methodology to create a valuation matrix specific to each originator, Brismo can help you to value a range of loan types whilst providing consistency of methodology.

Get in touch to find out how we can help you streamline reporting to clients and stakeholders.