Oil pain mounts as second Canadian bank gives early warning of higher credit loss provisions

, Economic

National Bank followed Canadian Western in the rare step of pre-announcing new provisions for losses due to low energy prices.

A second Canadian bank has taken the rare step of pre-announcing provisions for losses due to low energy prices, and analysts predict there may be more to come as banks feel the impact of the prolonged downturn on their bottom lines.

National Bank of Canada disclosed Thursday it expects to record specific provisions for credit losses of $17 million, and sectoral provisions of $250 million, both pre-tax, on its oil and gas portfolio in the second quarter.

Full quarterly results won’t be announced until June 1, but the provisions are expected to reduce earnings per share by about 54 cents. Analysts had been calling for earnings of around $1.14.

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