Dec 1 Canadian Western Bank reported a
smaller-than-expected profit as the company set aside more money
to cover potential losses from loans to oil and gas companies in
the wake of a slump in oil prices.
The bank, which mainly lends to clients in the western
provinces of Canada, including oil-rich Alberta, said its total
allowance for credit losses increased almost 10 percent to
C$103.8 million (about $77 million) in the quarter ended Oct.
"Challenges included the negative impact of low oil prices
and regulatory factors on our small portfolio of loans to oil
and gas producers," Chief Executive Chris Fowler said.
"We took a proactive approach to resolve positions within
this portfolio, which resulted in higher-than-expected
provisions for credit losses."
A nearly 55 percent drop in oil prices since mid-2014 has
forced banks to cut credit lines for oil and gas companies.
On an adjusted basis, the company earned 59 Canadian cents
per share, missing the average analyst estimate by 1 cent,
according to Thomson Reuters I/B/E/S.
The net income attributable to shareholders fell to C$47.8
million, or 54 Canadian cents per share, from C$53 million, or
66 Canadian cents per share, a year earlier.
($1 = C$1.3404)
(Reporting by Vishaka George in Bengaluru; Editing by Savio
D'Souza and Saumyadeb Chakrabarty)