Loan Deposit Ratio and Customer Retention
A loan deposit ratio (LDR) measures the ability of a bank to cover its loan losses and the withdrawals of its customers. This measure enables a bank to attract new customers and retain existing ones. Generally, LDR is expressed in percentage form. For example, a bank with an LDR of 95% will have a higher probability of attracting new business than one with a loan deposit ratio of only 50%. If a bank’s loan deposit ratio is high, it will be a sign that the bank is offering excellent service.
LDR is a measure of a bank’s ability to cover loan losses and withdrawals by its customers
LDR is a key measure of a bank’s liquidity. It shows how much money the bank can lend to its customers, and it also helps investors see how well the bank is managing its customer deposits. When deposits shrink, the bank will have less money to lend and may be forced to borrow to maintain a high LDR. If withdrawals by its customers exceed its loans, the bank may be losing money and will have to incur additional debt servicing costs.
The LDR is one of many measures of a bank’s liquidity. The capital adequacy ratio is another measure of a bank’s liquidity. This ratio is calculated by comparing the bank’s total deposits with the value of its loans. The higher the LDR, the higher the risk that the bank is to lose money on loans.
It helps attract and retain customers
Customer retention is an essential element of a business’s marketing strategy. It refers to the processes that turn existing customers into repeat customers. The goal of customer retention is to build brand loyalty and prevent customers from switching to a competitor. The best way to gauge whether a brand is retaining customers is to benchmark its customer retention rate against competitors’. Customer retention is essential to the success of subscription-based companies and is often overlooked. 주택담보대출
The customer experience is a two-way process, involving the entire company. For example, a marketing team can share the top product pain points with the product team, and vice-versa. That information can then be used by the marketing team to send automated discount codes and apology emails to existing customers. The result is a more successful marketing strategy for every business. Customers will appreciate the efforts you put into customer retention. And you can even continue to market to them after the initial sale.
It is primarily a risk measure for a bank
The bank’s ability to provide loans and meet funding obligations is an important part of its financial health. It is essential to meet these obligations because a bank’s failure to do so can have a snowball effect. Customers may lose confidence in the bank if it cannot provide them with the cash they need. Moreover, banks are subject to the risk of losing their money, which can cause a bank run.