Mitsubishi UFJ Financial Group Inc. and JPMorgan Chase & Co. have the biggest exposure to energy companies among banks, according to Citigroup Inc. analysts, Bloomberg reported Dec. 17.
This may make them more vulnerable to oil that’s at a five-year low.
Japan’s Mitsubishi UFJ granted about $81 billion (64.9 billion euros) of syndicated loans to the oil and gas industry from 2012 to December 2014, while JPMorgan loaned about $73.2 billion (58.7 billion euros), according to a report today by Citigroup analysts led by Ronit Ghose. They’re followed by Wells Fargo & Co.’s securities unit with $67.8 billion (54.4 billion euros) of loans, Citigroup said.
“In the past three years, U.S. banks have been three of the top five syndicated lenders to the global oil and gas sector,” said Ghose in the note. “Japanese and Canadian banks also feature strongly in syndicated loan tables.”
Oil prices plunged about 45% this year as a surge in shale drilling lifted U.S. output to the fastest pace in three decades as global demand slows. Members of OPEC, including Saudi Arabia, the world’s largest exporter, have resisted calls from producers such as Venezuela and Ecuador to reduce output to abate the price fall.
Mitsubishi UFJ Securities International Plc, the London based unit of the Japanese bank, this year joined JPMorgan, Deutsche Bank AG and Morgan Stanley in cutting back on commodities activities as regulators seek to toughen rules and curb speculation.
DNB ASA, Norway’s biggest lender, and Credit Agricole SA have the highest exposure among European banks to energy measured as a percentage of shareholder equity, Citigroup said.
Recommended Reading
Patterson-UTI Braces for Activity ‘Pause’ After E&P Consolidations
2024-02-19 - Patterson-UTI saw net income rebound from 2022 and CEO Andy Hendricks says the company is well positioned following a wave of E&P consolidations that may slow activity.
Mexico Pacific Appoints New CEO Bairstow
2024-04-15 - Sarah Bairstow joined Mexico Pacific Ltd. in 2019 and is assuming the CEO role following Ivan Van der Walt’s resignation.
Mitsubishi Makes Investment in MidOcean Energy LNG
2024-04-02 - MidOcean said Mitsubishi’s investment will help push a competitive long-term LNG growth platform for the company.
Shell’s CEO Sawan Says Confidence in US LNG is Slipping
2024-02-05 - Issues related to Venture Global LNG’s contract commitments and U.S. President Joe Biden’s recent decision to pause approvals of new U.S. liquefaction plants have raised questions about the reliability of the American LNG sector, according to Shell CEO Wael Sawan.
Tellurian, Institution Investor Agree to New Loan Repayment Terms
2024-02-22 - Tellurian reached an agreement with an unnamed institutional investor to pledge its interest in the Driftwood project as collateral.