The Globe and Mail reports in its Monday edition that RBC Dominion Securities analyst Darko Mihelic estimates that the Big Six banks in the second quarter will set aside more than $1.9-billion to cover bad loans, up 20 per cent from the previous quarter. Mr. Mihelic says, "Some indicators we track suggest that credit quality may have weakened for the Canadian banks in the second quarter and we continue to believe that we are still early in the rising part of the credit-loss cycle." Mr. Mihelic expects that provisions for bad business loans in particular, a category that would include loans to oil and gas companies, will surge 170 per cent from the previous quarter, to a total of more than $600-million. The challenge from the depressed energy sector comes at a time when Canadian banks are also cutting expenses to meet slowing revenue growth, and redirecting resources from traditional banking toward on-line and mobile banking -- leading to job cuts and large restructuring charges. Bank of Nova Scotia announced this month that it would take a charge of about $375-million, before taxes, in the second quarter as part of its "strategic efforts." The second quarter reporting season commences Wednesday.