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GLOSSARYTERMS AS A CREDIT DESK USES THEM

Single-name limit

What is a single-name limit, and what happens when a deal would breach it?

ONE OF 366 TERMS · FREE · NO SIGNUP

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED

// THE SHORT ANSWER

A single-name limit caps how much a bank will lend to one borrower, counting every company in its group as one name. Banks set internal limits, often scaled to the risk grade so a strongly rated group can carry more than a weak one, and a deal that would breach the limit is usually reduced, shared with other lenders, declined or taken to a higher authority as an exception, however good the credit. Above it sits a regulatory limit: supervisors in the UK and Australia, following the Basel large-exposures standard, cap a bank's exposure to one counterparty or connected group at 25% of its Tier 1 capital.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.

// WHAT IT IS NOT

A concentration limit is the wider family of caps, by sector, geography and name; a single-name limit is the one for a single borrower group, and connected exposure is how that group is counted.

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