Great Western Financial Corp. is joining the parade of banking companies installing technologies to manage risk.

The $43.5 billion-asset Chatsworth, Calif., thrift is putting part of $60 million from reductions in its Savings Association Insurance Fund premiums toward technologies that will help it identify risk in its balance sheets and develop products that are more profitable and competitive.

William C. "Willie" Wolfe, first vice president and head of Great Western's asset-liability management team, said the savings - deposit premiums have been reduced from 26 basis points to six - will let the thrift hone two sophisticated risk management software systems, known respectively as Radar and Catalyst.

Developed by Risk Management Technologies, a software and consulting firm in Berkeley, Calif., Radar uses client-server technology to manage interest rate, currency, credit, and operational risk.

Catalyst, developed by Cats Software Inc., Palo Alto, Calif., is a trading system used to develop and assess hedging strategies.

The two systems are helping Great Western improve earnings, Mr. Wolfe said, though he did not get specific.

Radar, installed at the thrift in 1994, is being used to examine the profit potential of various consumer products, in addition to managing risks across the balance sheet.

Catalyst, currently being installed, will be used to aid Great Western in managing trades in Eurodollar futures, a derivative product that has been a popular risk management tool for commercial banks but that is relatively new in the thrift industry.

Mr. Wolfe said the systems would be crucial to the success of Great Western as it makes its transformation from a traditional thrift to an institution that is more "bank-like."

That transformation already is under way.

In December, Great Western announced a restructuring that will include the elimination of 800 jobs - 6% of its work force - by the end of this year, shuttering of mortgage offices, and revamping of computer systems.

The restructuring also will include the sale of nearly $300 million of nonperforming home loans made mostly in California during the early 1990s.

Before that announcement, Great Western was moving to divest itself of less profitable businesses. In November, it said it would sell a $370 million student loan portfolio to Crestar Financial Corp. of Richmond, Va., for undisclosed terms.

And the thrift has acknowledged its desire either to sell or form a partnership with another company to manage its Sierra Trust mutual funds.

Great Western will take a charge in the fourth quarter as a result of the restructuring, ending the year with an estimated 3.30% net interest margin. Through 1996, its net interest margin fluctuated from 3.39% in the first quarter to 3.26% in the third quarter, according to Thomas O'Donnell, analyst at Smith Barney in New York.

"As we move from the old S&L paradigm of originating mortgages and collecting time deposits to a commercial bank where we start offering consumer loans, commercial products, and checking accounts, the interest rate profile will get progressively more complex," said Mr. Wolfe.

"We need tools to address any interest rate issues that arise."

Mr. Wolfe has spent the last year and a half at Great Western upgrading risk technologies.

His career also has included time as a senior consultant at Risk Management Technologies, as an investment manager and assistant treasurer at various Silicon Valley companies, and as a mergers and acquisitions consultant to Wells Fargo Nikko Investment Advisors in San Francisco.

He holds an MBA in finance and management information systems from Emory University in Atlanta and an undergraduate degree in mathematics and economics from New College, Sarasota, Fla.

It was through his job as a consultant for Risk Management Technologies that Mr. Wolfe was introduced to Great Western in 1995.

In the years leading up to that point, risk management systems were not very sophisticated, Mr. Wolfe said. Risk software tended to be PC-based and provided only high-level aggregate data.

But Radar and competing products developed by companies such as Treasury Services Inc. of Santa Monica, Calif., revolutionized bank asset- liability management when they were introduced in 1993, consultants said.

These programs "provide a more detailed, more accurate view," said Deborah Williams, consultant at Tower Group, Newton, Mass. "All of a sudden, banks had a vast toolbox to plan their balance sheets."

Radar and products like it measure "both market value and net interest income," explained Mr. Wolfe. "It allows you to make rational decisions as to what to offer to the consumer in terms of maximizing and enhancing returns to the financial institution."

Great Western installed Radar in 1994, spending $150,000 on new Unix workstations and computer equipment from Hewlett Packard. Risk Management Technologies advised on the project.

"In Willie, Great Western got someone who was not only an experienced executive, but someone who had a lot of flight time" on the Radar system, said David LaCross, chief executive of Risk Management Technologies.

The system is designed to help Great Western steer its course toward becoming more like a bank.

In November and January, Great Western announced plans to offer a broader line of consumer credit products, like home equity and automobile loans.

The goal, according to Great Western, is to sell $2 billion of consumer credit products annually by the turn of the century.

Radar "has allowed us to enhance yields by focusing on profitable products, and by focusing on product features that are important to customers and that customers will pay for," Mr. Wolfe said.

Radar works like this: A banker can input various interest rate scenarios an - culling information from a warehouse of deposit accounts, loan portfolios, and investment portfolios - forecast different risk profiles and compare the relative value of products.

The package includes a "mapping" function that extracts data from on-line processing systems and integrates it into a data base that feeds Great Western's analytical systems, in this case Radar and Catalyst.

Such enterprise-wide management systems have been catching on, particularly with large banks that have undergone multiple mergers and acquisitions, said Mr. LaCross.

"In merged institutions, data reside on multiple legacy systems," he said. "Banks need a program that brings those pieces together to they can see what they have."

Radar allows Great Western to make hedges, not with derivative instruments, but with portions of the balance sheet. "It's cheaper to buy hedging through products than to go to the market for a derivative," said Mr. Wolfe.

Radar also helps Great Western price products in which it wants to find a competitive niche.

For example, Great Western will price a mortgage that starts out at a three-year fixed rate and converts to an adjustable rate more competitively than it would price a similar loan that starts out with a five- or seven-year fixed rate.

"It's more natural to us," explains Mr. Wolfe. "Five- or seven-year fixed-rate mortgages are less appealing from a portfolio perspective."

The system also lets Mr. Wolfe and his team of asset-liability managers decide which pieces of the portfolio to sell. "We want to make sure that we keep products that have more value to us than to Wall Street. If we think it has less value to us than to Wall Street, then we should sell it."

On the trading floor, Great Western is using Catalyst to manage risks in its investment portfolio. The program includes modules for trading, accounting, and managing daily risks.

Eurodollar futures are among the derivatives the thrift is buying to hedge its portfolio. "It's a sign of things to come," said Mr. Wolfe.

"As savings and loans try to compete with commercial institutions," he said, "we will ultimately move that way. We're not quite the leading edge. But we're progressive in this area."

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