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BankNet

BankNet
More resources for national banks

Concentrations / Portfolio Management

A concentration of credit consists of direct, indirect, or contingent obligations exceeding 25 percent of a bank’s capital structure. In general concentrations may involve one borrower, an affiliated group of borrowers, or borrowers engaged in or dependent on one industry.

A bank’s loan portfolio is typically its largest asset and predominate source of revenue. Consequently, it is also one of the greatest sources of risk, making effective portfolio management a key factor in bank safety and soundness.

Learn More

Concentrations of Credit (Comptroller’s Handbook, December 2011)
Provides examples of concentrations of credits, discusses key factors, and provides examiner guidance

Loan Portfolio Management (Comptroller’s Handbook, April 1998)
Outlines nine elements that underpin a bank’s loan portfolio management process and provides examiner guidance.

References

Concentrations in Commercial Real Estate Lending (OCC 2006-46, December 2006), Guidance (Federal Register, December 12, 2006)
Addresses sound risk management practices and includes guidance published in the Federal Register

Concentrations of Credit: Revised Booklet (OCC 2011-48, December 13, 2011)
Announces the revision of the Concentrations of Credit booklet and highlights changes in how concentrations are included in reports of examination