Never mind the volatility seen in the oil markets since March. The commercial banking sector experienced its worst year in 30 years in 2019, according to Mike Lister, J.P. Morgan managing director and group head for energy and power. Banks suffered some $750 million to $1 billion in reserve-based loan (RBL) charge-offs, he estimated, which are supposed to be the most secure energy loans.

“Let that wash over you for a minute. Not 2016, not 2015—that was a relative movement,” Lister said. 2019 was “very material, and I think that trend is going to continue at least into the first half of 2020 and likely the full year given what we’re dealing with in the markets now.”

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