WASHINGTON (Sputnik) — The rating agency noted that Canadian banks have "a sizable exposure" to energy-related lending.
"Fitch Ratings expects the cost of credit to rise in Canada as banks feel continued pressure from the slow recovery of oil prices impacting Alberta and other oil provinces and concerns about record consumer debt levels," the release stated.
However, Fitch Ratings Senior Director Doriana Gamboa said the outlook for Canadian banks remains neutral "as any losses are unlikely to erode the diversified business mix and generally solid loss-absorption buffers."
Oil prices have plunged more than 60 percent from their peak of over $110 a barrel in June 2014 due to the global oil production outpacing the world’s demand for oil.
