National Bank CFO: oil and gas exposure in loan book about 1%

A senior executive at a major U.S. bank recently stated that oil and gas exposure in the institution's loan portfolio currently accounts for approximately 1% of total lending activity. This figure reflects a broader industry trend of reduced fossil fuel financing, with the six largest U.S. banks cutting year-on-year funding to oil, gas, and coal projects by 25% through August 2025, amounting to $73 billion compared to $97 billion in the same period in 2024. The decline contrasts sharply with earlier data: since the Paris Agreement (2016–2023), the top six U.S. banks collectively financed $1.8 trillion in fossil fuel projects, including $347 billion in 2023 alone for companies expanding oil, gas, and coal infrastructure.

The shift is attributed to market dynamics, including rising interest rates, regulatory uncertainty, and investor demand for lower-risk, decarbonized portfolios. For example, JPMorgan Chase reduced fossil fuel financing by 7% year-on-year in 2025, while Morgan Stanley cut its exposure by over 50%. Despite political pressures favoring fossil fuels, banks are prioritizing capital allocation toward sectors perceived as more resilient, such as renewables and grid infrastructure.

The 1% exposure cited by the National Bank CFO aligns with a sector-wide recalibration. However, challenges remain: smaller producers and capital-intensive projects, such as LNG terminals, continue to rely on bank financing, albeit at reduced levels. Meanwhile, global clean energy investment surpassed fossil fuel spending in 2024, signaling a structural realignment in capital flows.

This trend underscores the growing influence of market forces over political directives, with financial institutions increasingly aligning lending practices with long-term climate risks and investor expectations.