Side-by-side credit pricing comparison from Pillar 3 disclosures.
On a representative BBB+ EUR 25M 5-year term loan, HSBC is the cheaper lender by 5bp in minimum spread. For a EUR 25M facility, that's EUR 13,405 per year.
| Metric | HSBC United Kingdom |
NatWest Group United Kingdom |
|---|---|---|
| IRB approach | Mixed | A-IRB |
| Cost-to-income | 53.3% | 48.6% |
| Effective tax rate | 22.7% | 24.3% |
| Avg corporate PD | 3.07% | 1.20% |
| Avg LGD unsecured | 39.9% | 37.0% |
| Avg LGD secured | 20.0% | 20.0% |
| Funding spread (bp) | 15bp | 15bp |
| Corporate EAD | EUR 540bn | EUR 109bn |
Both banks priced on the exact same deal — 150bp spread, 20bp commitment fee, 60-month maturity. Higher RAROC means the bank earns more from this deal. Lower min-spread means the borrower gets a better rate.
| Component | HSBC | NatWest Group |
|---|---|---|
| Annual revenue | EUR 385,000 | EUR 385,000 |
| Operating cost | EUR 154,000 | EUR 154,000 |
| Expected loss | EUR 28,750 | EUR 28,750 |
| Capital required (FPE) | EUR 2,451,320 | EUR 2,451,320 |
| RAROC (after tax) | 7.53% | 7.37% |
| Min spread for 12% RAROC | 244bp | 250bp |
Your actual portfolio has different ratings, sizes, maturities, and collateral. The cheapest bank for one deal isn't always cheapest for another. Upload your real facilities and OpenRAROC will run the same calculation on each, against HSBC, NatWest Group, and 57 other banks.
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