Principality has appointed Jaywing to assist its stress testing programme and support the building society in meeting future stress testing objectives.

This latest appointment follows the work Jaywing successfully completed in helping Principality, the UK’s sixth largest building society*, finalise the development of its IRB (Internal Ratings Based) models for its Nemo, second charge, portfolio. The stress testing programme will review Principality’s end-to-end stress testing processes and will see Jaywing making recommendations for any changes. The project will build on Principality’s existing foundations in economic modelling and forecasting techniques and will be invaluable in helping Principality prepare to address the changes required by the introduction of IFRS9 (International Financial Reporting Standards) in the future.

Jaywing’s team of experienced stress testers will work with Principality to build upon its existing framework and lead to an improved stress testing process that will increase confidence in the forecasted outputs and improve service to Members. The proposed review will look at the stress testing approaches for both its retail and second charge secured loan portfolios.

Mike Pollitt, Head of Group Credit Risk at Principality said: “We were impressed with the work Jaywing completed in 2014 and are looking forward to working with them again. By working with Jaywing we can be sure we’ll have an improved stress testing process and a roadmap for future developments.”

Adrian Lingard, Consulting Managing Director at Jaywing, said: “This latest appointment is testament to the wealth of stress testing experience our talented consultants hold and builds upon our recent stress testing work with Nationwide and Secure Trust Bank. Our skills in data, modelling and analysis, and our experience working with leading banks and building societies, means we understand the full end to end stress testing process and the complexities involved in forecasting. We are looking forward to using this experience and expertise to help Principality develop its stress testing capabilities and help refine its stress testing and loss forecasting processes.”