“There’s no question this is a tough year,” said Mayo. “There are headwinds from revenues, rates and regulation. Those aren’t going away anytime soon.”

Bank of America, Citigroup Inc., JPMorgan and Wells Fargo & Co. have set aside more than $2.5 billion to cover souring energy loans and will add to that if prices remain low. Losses are mounting as more oil producers default on debt payments and declare bankruptcy.

The fourth quarter “confirmed that on the corporate side, the credit cycle has turned,” Peabody said, adding that for the industry, losses on energy will likely amount to 10 percent to 15 percent of total credit exposure to energy companies in 2017.
 

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