ATB Financial earnings drop on potential loan losses amid oilpatch downturn
Posted Feb 11, 2016 03:41:32 PM.
This article is more than 5 years old.
CALGARY – ATB Financial’s earnings plunged in the last quarter compared with a year ago as the bank prepared for a potential big increase in loan losses amid the continuing downturn in the oilpatch.
The Alberta crown corporation says net income was $32.5 million for the last three months of 2015, down from earnings of $91.5 million in the same quarter a year earlier.
Much of that was attributed to a surge in anticipated loan losses, with the company booking $91.3 million in credit loss provisions in the quarter, compared with $18.8 million a year ago.
The bank says the increase was largely due to several high-value loans in the exploration and production portfolio becoming impaired in the quarter.
ATB said the credit loss provision category was a “clear gauge of the challenges faced by companies in the oil and gas sector, and related service sectors.”
As of the end of December the bank’s gross impaired loans totalled $425.8 million or 1.1 per cent of its total loan portfolio, up from 0.44 per cent a year ago.