CPR

The profitability of any given relationship to the bank can be reflected in the customer profitability analysis.

The financial statement analysis can only make an evaluation of the financial strengths and wekaness of the borrowing client and have little to do whether the customer is profitable to the bank.

While the customer is profitable in their own financial statments. But in its dealings with the bank the bank's cost of servicing the customer may far exceed the revenues derived from the customer.

It is therefore important to compute customer profitability in lending operations.