Wells Fargo & Co. (NYSE: WFC) racked up a 62% increase in potentially problematic loans, mainly to oil and gas companies, according to its first-quarter regulatory financial filing released on May 4.
Loans regulators define as "criticized" rose to nearly $30 billion as of March 31 from about $18.5 billion at the end of 2015, the filing said. The remaining $290.5 billion of Wells Fargo's commercial and industrial loan portfolio was classified as "pass."
Criticized loans range from those with potential weaknesses to essentially worthless ones that should no longer count as assets on bank balance sheets.
Wells Fargo's total energy-related exposure, including funded and unfunded loans, decreased $317 million to $43.5 billion in the quarter, the filing said.
Wells Fargo and other banks have beefed up reserves for possible loan losses as sharply lower oil prices have made it difficult for energy companies to repay their debts. Wells Fargo has been one of the most aggressive large banks in providing equity and second lien financing to small E&Ps in the sector.
In its quarterly filing on April 29, JPMorgan Chase & Co. (NYSE: JPM) said its criticized loans to the oil and gas industry more than doubled to $9.7 billion at the end of March. Wells Fargo did not specify what portion of its oil and gas loans were criticized.
JPMorgan's overall criticized loans rose to about $21.2 billion from $14.6 billion at year-end, a 45% increase.
Recommended Reading
Chouest Acquires ROV Company ROVOP to Expand Subsea Capabilities
2024-05-02 - With the acquisition of ROVOP, Chouest will have a fleet of more than 100 ROVs.
SLB, OneSubsea, Subsea 7 Sign Collaboration Deal with Equinor
2024-05-02 - Work is expected to begin immediately on Equinor’s Wisting and Bay Du Nord projects.
SilverBow Makes Horseshoe Lateral in Austin Chalk
2024-05-01 - SilverBow Resources’ 8,900-foot lateral was drilled in Live Oak County at the intersection of South Texas’ oil and condensate phases. It's a first in the Chalk.
Petrobras Sending Nearly Half of Oil Exports to China
2024-04-30 - Conflict in the Middle East has enabled Brazil’s state-owned Petrobras to change the flow of its oil exports, with China being the primary beneficiary, followed by Europe.
Equinor Says EQT Asset Swap Upgrades International Portfolio
2024-04-30 - Equinor CFO Torgrim Reitan says the company’s recent U.S. asset swap with EQT Corp. was an example of the European company “high-grading” its international E&P portfolio.