Deep Dive: You should avoid shares of these banks with too much oil and gas exposure

Deep Dive: You should avoid shares of these banks with too much oil and gas exposure

Opinion: You should avoid shares of these banks with too much oil and gas exposure. Oil prices are now so low, banks' bad loans to the energy sector may lead to dividend cuts - or worse. Investors had better worry about banks with significant exposure to the oil and natural gas industry, in the wake of Saudi Arabia's decision to cut oil prices and increase production at a time of greatly reduced demand.. Analysts at Keefe, Bruyette & Woods published a list March 8 of U.S. banks with the largest amount of credit exposure to tangible common equity (TCE) - the measure of capital that is particularly useful to common shareholders, because it tells them what their stake in the bank is really worth.. The largest U.S. banks have provided additional industry credit exposure in their annual reports.. In its annual report (on page 110 of its 10-K filing ), the largest U.S. bank said total credit exposure to the oil and gas industry was $41.57 billion, or 4.4% of wholesale credit exposure, net of hedges, and 22.1% of TCE.. had total oil and gas loan exposure of 10% of TCE as of Dec. 31, according to KBW..