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US Oil, Gas Industry Debt Elevates Risk in Banking Industry

© AP Photo / Rich PedroncelliThe US Environmental Protection Agency is going to review California’s underground injection control program amid concerns about the impact of oil and gas companies on the quality of drinking water in the region.
The US Environmental Protection Agency is going to review California’s underground injection control program amid concerns about the impact of oil and gas companies on the quality of drinking water in the region. - Sputnik International
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The US Federal Deposit Insurance Corporation said that debt owed by oil and gas producers has elevated risk levels in the US Shared National Credit (SNC) portfolio, raising fears of an increase in problem loans.

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WASHINGTON (Sputnik) – Debt owed by oil and gas producers has elevated risk levels in the US Shared National Credit (SNC) portfolio, raising fears of an increase in problem loans, the US Federal Deposit Insurance Corporation said in a press release.

"The elevated level of risk observed during the recent SNC examination stems from the high inherent risk in the leveraged loan portfolio and growing credit risk in the oil and gas (O&G) portfolio," the release, issued on Friday, stated.

The release explained that the threat is mitigated by improved underwriting and risk management practices in the most recent loan originations.

The 2016 SNC portfolio included 10,837 lenders, 6,676 borrowers and debt totalling $4.1trillion, up from $3.91 trillion in 2015, according to the release.

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