Texas banks face increasing risks from low oil prices

Texas banks

Texas banks along with some in parts of Louisiana and New Mexico are setting aside money to guard against losses as energy companies they serve struggle amid low oil prices.

Texas banks under additional scrutiny

June 16 (Reuters) – Banks in Texas and parts of Louisiana and New Mexico are setting aside more money to guard against loan losses as the energy companies they serve struggle amid still-low oil prices, the Dallas Federal Reserve Bank said in a report Thursday.

Banks in the district supervised by the Dallas Fed are also getting additional scrutiny for their commercial real estate loans, the regional Fed bank’s president, Robert Kaplan, said in the report, which characterized commercial real estate as an “emerging area of concern.”

“Loan growth slowed markedly in 2015 and, while the region’s banks remain profitable, bankers are setting aside more in provision expense to cover possible loan losses,” Kaplan wrote in an introduction to the bank’s quarterly Southwest Economy report.

Kaplan, who participated in this week’s Fed policy-setting meeting in Washington, did not touch on the outlook for the national economy or monetary policy in his comments.

(Reporting by Ann Saphir; Editing by James Dalgleish)

Posted in: News

Post a Comment