Canadian Western Bank reignites concerns about energy loan losses at big banks

, Crisis

Canadian Western Bank said it would record $33 million of provisions for credit losses on its oil and gas production portfolio.

A dramatic increase in expected energy-related loan losses at Canadian Western Bank has reignited concerns that the effects of the energy downturn are just beginning to be felt by the country’s biggest lenders.

In a pre-announcement before second quarter financial results are released later this month, the Edmonton-based bank said it will record $33 million of provisions for credit losses on its oil and gas production portfolio, owing to the weak oil price environment and borrowing base redeterminations.

In addition to the updated credit losses for the quarter, the bank sharply increased its full-year loan loss guidance to 35 to 45 basis points from 18 to 23 basis points.

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