Customer relationship loan-pricing model based on RAROC

The paper combines the customer profitability analysis model and RAROC model to establish customer relationship loan pricing model based on RAROC. This model herits the advantage of RAROC model, such as risk management, capital allocation, measurement performance and value management etc. It combines the conception of revenue contribution in customer profitability analysis model with the conception of risk contribution in RAROC model. This overwhelms the limitation of Customer profitability analysis model which can only be used when bank and customer have long time business cooperation relationship.