FTP (funds transfer pricing)

Roles that need it

• ALM Analyst
• Treasury Analyst
• Business Controller
• FP&A Analyst

Skills it belongs to

• Asset-liability management and rate risk
• Profitability analysis (margins, contribution)
• Liquidity metrics (LCR, NSFR)

Related concepts

• Asset and liability management (ALM)Asset and liability management is the management of a balance sheet's interest rate, liquidity and funding risks so that assets and liabilities fit together in maturity, currency and rate. ALM teams run the ALCO (asset and liability committee), hedging and funds transfer pricing.
• Cost allocationCost allocation assigns shared costs, such as IT, operations or head office, to the products, business lines or entities that use them, using drivers like headcount, transaction volumes or usage. It feeds product profitability, pricing and internal charging.
• RAROC (risk-adjusted return on capital)RAROC divides a risk-adjusted profit (revenue minus costs and expected loss) by the economic or regulatory capital a deal or business consumes. Banks compare it with a hurdle rate to price loans and decide where to allocate capital. RORAC is a close variant.
• NII sensitivityNII sensitivity measures how a bank's net interest income over a horizon, typically 12 months, changes under interest rate scenarios such as parallel shocks. It captures repricing gaps, basis risk and deposit behaviour. EU supervisors apply an NII outlier test alongside the EVE test.

Sources

• Guidelines on liquidity cost benefit allocation, EBA (external site) accessed 31 Oct 2026
• Principles for sound liquidity risk management and supervision, BIS (external site) accessed 31 Oct 2026

Updated 31 Oct 2026.