UPDATE 2-Canada's Scotiabank warns oil firms' credit to be cut

Tue Apr 12, 2016 3:01pm EDT
 
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* Bank is undertaking bi-annual base redeterminations

* CEO says cuts "somewhere in ballpark" of 15-20 pct

* CEO says to pursue acquisitions selectively

* Credit lines to oil firms will be tightened - CEO (Recasts with more CEO comments on oil firms' borrowing lines, consolidation in oil sector)

By Matt Scuffham

CALGARY, April 12 (Reuters) - Bank of Nova Scotia, Canada's third largest bank by market value, said that credit lines to oil firms will be tightened to reflect lower oil prices, a move which could make it tougher for some to survive.

Energy companies across Canada and the United States are meeting with their banks to review existing loans and determine how much debt they can continue to hold as part of a bi-annual process.

Scotiabank has the highest exposure to the oil and gas sector of any major Canadian bank, equivalent to 3.6 percent of its total loan book, and said in March that it had increased provisions for bad loans to oil and gas firms.

"There will be a cut in borrowing bases," Chief Executive Brian Porter told reporters after the bank's annual meeting on Tuesday.   Continued...