UPDATE 2-Canadian Western Bank says all energy loans under watch

Thu Jun 2, 2016 4:15pm EDT
 
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* CEO says bank watching every oil & gas loan closely

* Second quarter profit down 37 percent (Recasts, adds CEO comments from conference call)

By Matt Scuffham

TORONTO, June 2 (Reuters) - Canadian Western Bank said on Thursday it was monitoring all lending to oil and gas producers after reporting a 37 percent decline in second-quarter profit as struggling clients defaulted on loan repayments.

Canada's biggest banks, including Royal Bank of Canada , Toronto-Dominion Bank and Bank of Nova Scotia , all announced increased losses on loans to energy companies in the second quarter as oil prices touched 13-year lows in February leading to rising defaults.

Canada Western Bank, based in Canada's oil-rich Alberta province, set aside C$33 million to cover bad loans to oil and gas companies. It has C$327 million in loans outstanding to the sector, equivalent to 2 percent of its total lending.

"I would say we are watching every loan," Chief Executive Chris Fowler told analysts.

"This whole industry is challenged right now. Not every loan financially is on the watch list but we're looking at every loan. There's been a lot of volatility and it's not the right time not to look at everything very closely," he said.

The bank reported net income for the quarter of C$32.2 million ($24.6 million) or C$0.41 per share, in line with analysts forecasts.   Continued...