The paper examines how loan portfolio diversification drives bank returns, mainly focusing on the conditioning roles of … increased sectoral loan portfolio diversification reduces bank returns, but not all banks are equally affected. Banks that … adopted a business model towards non-interest activities are hurt less from loan portfolio diversification, and bank market …

Should banks be diversified or focused? Does diversification indeed lead to enhanced performance and, therefore … banks' profitability (ROA) and their portfolio diversification across different industries, broader economic sectors and … geographical regions measured by the Herfindahl Index. To explore this issue, we use a unique data set of the individual bank loan …

risk factors, we separate the bank-specific selection and monitoring abilities from the composition of the loan portfolio …, on average, lower loan losses, (b) the loss rate of a given industry in a bank's loan portfolio is lower if the bank has …