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Canadian Western Bank loses 37% of its profit resulted by stagnation of oil patch loans
 Canadian Western Bank reports that low energy prices reduced the cash flow of oil and gas producers at the beginning of this year. 02.Jun.16 10:34 PM By Anastasia Sutulova Photo Toinnov.com |
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Second-quarter profit of the Canadian Western Bank declined by 37% which resulted in increasing funds set aside to cover loans to oil and gas companies. Oil prices reached the lowest level in February. Such situation has put a big pressure on the energy companies and their ability to pay back loans. As a result, loan defaults have been rising which has not been profitable for the Canadian banks. “The impact of very low oil and gas prices on producer cash flows early in the calendar year, as well as subsequent borrowing base redeterminations, led to an increase in credit stress within this portfolio compared to prior quarters,” said chief executive Chris Fowler. “We are maintaining a realistic outlook as we work with our clients through the difficult operating environment in Alberta,” he added. | |
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