The obvious benefit to holding a diversified portfolio of loans is to spread risk exposures so that

Question:

The obvious benefit to holding a diversified of loans is to spread risk exposures so that a single event does not result in a great loss to an FI. Are there any benefits to not being diversified?
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...