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Bank of Nova Scotia
Symbol BNS
Shares Issued 1,227,821,621
Close 2018-12-07 C$ 71.60
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Globe says Big Six banks unfazed by crude's price crash

2018-12-10 07:55 ET - In the News

See In the News (C-BMO) Bank of Montreal

The Globe and Mail reports in its Monday edition that Canada's big banks are brushing off the recent crash in domestic-crude prices, confident that their loan books are in solid shape. The Globe's Tim Kiladze and Alexandra Posadzki write that collectively, the Big Six banks reported $45-billion in annual profits for fiscal 2018, which ended on Oct 31. Yet on recent conference calls to discuss their fourth-quarter earnings, analysts pressed executives for details about their loan exposures to oil-and-gas companies, worried that a crisis could be brewing behind the scenes, resulting in large writedowns. All six banks responded in the same fashion: This is not 2016. There was barely a crisis for them then, and there definitely isn't one now. "Since 2015 and 2016, we've 'up-tiered' the companies we deal with," Dieter Jentsch, head of global banking and markets at Bank of Nova Scotia, said on a conference call. "The balance sheets that we see in the business have never been as strong." When the global price of crude plummeted below $30 (U.S.) per barrel in early February, 2016, attention turned to the amount of loans outstanding to non-investment-grade companies. Some banks moved to protect themselves.

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