8
4.1.2 Loan Portfolio Concentration and Composition: Acquired and Greenfield Foreign-owned Banks
The EHHI and THHI loan portfolio concentration of acquired and greenfield FBs is graphically depicted in Figures 4.1 and 4.2.
4.1.2.1 Economic Sector Bank Loan Portfolio Concentration EHHI
Greenfield FBs are the most EHHI concentrated over the total research period although they show a decrease in concentration over the period 2005 to 2011. In contrast, the
EHHI concentration levels of acquired GBs tend to increase over the 2003 to 2009 period with a minor decrease from 2009 to 2011Figure 4.1. These findings indicate the overall
tendency of greenfield FBs to diversify loan portfolio composition although remaining more concentrated than acquired FBs.
Figure 4.1 Loan Portfolio Concentration Based on Economic Sectors: Acquired and Greenfield Foreign-owned Banks
4.1.2.2 Loan Type THHI Bank Loan Portfolio Concentration
Figure 4.2. shows that from 2003 to 2007, the THHI levels of both acquired and greenfield FBs are very different from each other, but shows a converging tendency from 2007
onwards since acquired FBs tend to become more concentrated whilst the loan portfolios of greenfield FBs become slightly more diversified. The tendency is similar to EHHI as
shown previously in Figure 4.1. Figure 4.2 Loan Portfolio Concentration Based on Loan Types: Acquired and
Greenfield Foreign-owned Banks
0.2 0.4
0.6
2003 2004
2005 2006
2007 2008
2009 2010
2011 Acquired
Greenfield
0.2 0.4
0.6 0.8
2003 2004
2005 2006
2007 2008
2009 2010
2011 Acquired
Greenfield
9
4.1.2.3 Loan Portfolio Composition: Acquired and Greenfield Foreign- owned Banks
The economic sector focus of acquired and greenfield FBs for the period 2003 to 2011 is depicted in Figure 4.3. Acquired FBs focus primarily on four different economic sectors
trade, others, manufacturing and business services with the exposure ranging between 10 and 31 in each of the sectors. The exposures to these sectors are volatile and
change significantly from year to year with an overall downturn in their loan exposure to the manufacturing sector. Greenfield FBs focus primarily on the manufacturing sector with
a decline from 57 exposure in 2003 to 38 in 2011. Unspecified others is the second largest focus of greenfield FBs with an increasing trend from 16 in 2003 to 21 in 2011
of exposure to this sector. Therefore, it is evident that the loan portfolio composition of the acquired and greenfield FBs differ, with the latter being more concentrated.
Figure 4.3 Percentage Loan Portfolio Allocation to Different Economic Sectors for Acquired vs Greenfield Foreign-owned Banks
Working capital loans represent the vast majority of loans for both acquired and greenfield FBs although working capital loans of acquired FBs increased over time from 47 to
65 whilst that of greenfield FBs decreased from 76 to 66. In the case of acquired FBs, their loan exposures to investment loans and consumer loans declined in total from
52 to 35, whilst these loan exposures of greenfield FBs increased from 24 to 34. It is evident that the THHI of acquired FBs are more concentrated over time whilst that of
greenfield FBs are more diversified and that the loan type portfolio compositions of the two types of FBs are much more similar in 2011 than in 2003.
0.05 0.1
0.15 0.2
0.25 0.3
0.35
20 03
20 04
20 05
20 06
20 07
20 08
20 09
20 10
20 11
Acquired Banks
agri mining
manuf elec
constr trade
transp bus_serv
soc_serv others
0.1 0.2
0.3 0.4
0.5 0.6
0.7
20 03
2 4
20 05
20 06
20 07
20 08
20 09
20 10
2 1
1
Greenfield Banks
agri mining
manuf elec
constr trade
transp bus_serv
soc_serv others
13
Figure 4.5 Percentage Loan Portfolio Allocation Based on Loan Types for Acquired and Greenfield Foreign-owned Banks
4.1.2 Loan Portfolio Performance Risk and Return of Acquired vs Greenfield Foreign-owned Banks
