Banks Brace for Bigger Losses After Oil Drops Below $30
- More oil and gas losses possible in 2016, Wells Fargo CEO Says
- Loan-loss reserves at major oil lenders exceeds $2 billion
Earnings: Are Big Banks Just Running in Place?
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The Wall Street banks that financed the U.S. shale boom are facing growing losses as oil falls below $30 a barrel.
Losses are spreading from bondholders to banks amid the worst oil crash in a generation. Wells Fargo & Co., Citigroup Inc.and JPMorgan Chase & Co. have set aside more than $2 billion combined to cover souring energy loans and will add to that safety net if prices remain low, the companies reported this week. Losses are mounting as more oil and natural gas producers default on debt payments and declare bankruptcy. Wells Fargo lost $118 million on its energy portfolio in the fourth quarter and Citigroup lost $75 million.