BMO stress testing 25 dollar oil
Posted Jan 12, 2016 9:25 am.
This article is more than 5 years old.
Recent declines in the price of crude are spurring Canadian banks to take a closer look at their loan books, with Bank of Montreal stress-testing its oil and gas sector portfolio to see how it would perform if crude hits 25-dollars U-S a barrel.
Bank of Montreal chief executive Bill Downe (DOWN) says the bank is also stress testing its broader loan portfolios _ which includes consumer mortgages, credit cards and auto loans _ for an average of 35-dollars a barrel over the course of the year.
Downe commented at the Canadian Bank C-E-O Conference in Toronto as crude oil futures were trading at about 32-dollars U-S a barrel, up slightly from a 12-year low they hit earlier today.
Royal Bank C-E-O Dave McKay expects oil to start moving back towards the 50-dollar U-S a barrel range _ and maybe slightly above _ over the next 18 months.
He says Canada’s economic woes have been contained within oil-producing provinces, particularly Alberta, while other regions are being helped by the falling dollar.
