Tag: Correlations

Diversification In Your Bank's Loan Portfolio That Makes A Difference

Commercial Real Estate Portfolio Management

Like Degas obsessed with dancers, bankers have been brought up to obsess over the composition of their loan portfolio. Egged on by our examiners, auditors and random pundits, we slice and dice our loan portfolios as if it means something and pat ourselves on the back when we can show a nice pie chart with lots of even looking slices. The reality is many of our sectors move together and offer little in the way of diversification. When the economy turns, tenants aren’t looking for new office space any more than they are looking for new industrial space.

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