Credit Portfolio versus Loan Portfolio

From Open Risk Manual

Credit Portfolio versus Loan Portfolio

A loan portfolio is best understood as a subset of the broader credit portfolio class


  • The primary distinction between a Credit Portfolio and a Loan Portfolio stems from the fact that a wide array of Financial Products, beyond the traditional Lending products category involve Credit Risk. Such products and/or contracts that may carry substantial credit risk are Derivatives, bonds, Securitisation etc.
  • The different markets and nature of the product involved means that there are also differences in portfolios are managed, for example
    • Risk assessment (e.g. based on market information or client information)
    • Risk management (tools available for risk mitigation)
    • Possible trading strategies
    • Accounting Regime
    • Regulatory Regime (including required risk capital)


  • Despite the potentially significant differences, a unifying feature of all credit portfolios is that the core underlying risk is the credit risk of borrowers
  • The machinery for quantitative analysis of credit portfolio risk is broadly similar-- --

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