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Oil Rally Sparks Surprise Drop in Bad Loans for Canadian Banks

  • Six banks had C$1.99 billion of provisions, below expectations
  • Pace of growth in impaired oil-and-gas loans eases since April

The oil-induced pain for Canadian banks is showing signs of easing.

The nation’s six biggest lenders set aside a combined C$1.99 billion ($1.52 billion) for bad loans in the most recent quarter, 11 percent below analysts’ expectations, as a rally in oil prices bolstered energy companies’ balance sheets. The provisions for credit losses were down from C$2.64 billion in the fiscal second quarter.