What is credit concentration?

A quick video explaining what a bank's credit concentration is and what it measures.

What is credit concentration?

Credit concentration measures how well diversified a bank’s lending is.

Like the old advice, Banks try not to have all their eggs in the same basket.

Credit concentration can be measured in a number of ways including how a bank’s lending is spread across different sectors and to individual customers.

The Bank Financial Strength Dashboard shows how much a bank lends to it’s 5 largest customers. That is, what portion of their overall lending is owed to the bank by its five largest customers compared to the total amount of capital it has.

This is to assess whether any one customer poses a risk to the overall stability of the bank.

You can check your bank’s credit concentration on the bank financial strength dashboard.

Go to the Bank Financial Strength Dashboard