May 4, 2015 / 6:03 PM / 4 years ago

Fed loan officer survey cites expected credit trouble in energy sector

WASHINGTON, May 4 (Reuters) - Bank lending officers said they expect more bad loans among companies in the energy sector, and have begun taking steps to protect against the downturn among oil and gas companies, according to a Fed survey released on Monday.

The quarterly survey covered senior loan officers at 76 U.S. banks and 23 branches of foreign banks. Overall, the loan officers reported a slight easing of lending conditions in key categories like commercial real estate, construction and land development, and home mortgages.

The loan officials also reported stronger demand in the real estate sector overall, both for commercial loans and for home mortgages.

They reported little change in lending conditions for business loans, with some banks saying they had tightened standards because of issues like economic uncertainty, but a similar number saying they had eased conditions because of increased competition among banks for business lending.

The one exception was in the oil and gas industry.

“More than half of the banks who made loans to this sector expected loan quality to deteriorate somewhat over the remainder of 2015,” the Fed survey said. However, the loans generally accounted for less than 10 percent of business lending, and banks reported they were already taking steps like restructuring, curbing credit lines and tightening standards for new loan applications. (Reporting by Howard Schneider; Editing by Phil Berlowitz)

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