Interest rate risk management

Interest rates reflect the economic situation in the country or in the region and can change rapidly. These changes have a direct impact on operating costs and investments of companies and financial institutions. The available tools of interest rate risk management offer protection against any adverse impacts of such changes.

Managing your interest rate risk can bring benefits for your business

Protection from unwanted interest rate changes
Fixed interest costs of long-term loans or investments
Possibility to take advantage of favourable market situation
Improved financial forecasting and budgeting

Financial risk assessment

Performing interest rate risk analysis related to your activities
Identifying potential losses due to interest rate fluctuations
Introducing the methods of interest rate risk management
Providing tailor-made hedging recommendations based on your risk exposure

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Services we provide

Interest rate swap

Interest rate swap (IRS) is a bilateral agreement to exchange interest payments at agreed periodicity for a specified period by converting a variable interest rate (e.g. Euribor 3m, Euribor 6m) into a fixed one or vice versa.

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Interest rate cap

Interest rate cap is an agreement under which the bank pays compensation to you in case the variable interest rate (e.g. Euribor 3m, Euribor 6m) exceeds the strike during an agreed period of time.

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Interest rate floor

Interest rate floor is an agreement under which the bank pays compensation to you in case the variable interest rate (e.g. Euribor 3m, Euribor 6m) falls below the strike during an agreed period.

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Interest rate collar

Interest rate collar is a transaction between you and the bank that determines the acceptable interval of the maximum and minimum variable interest rates (e.g. Euribor 3m, Euribor 6m) for agreed period.

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