US regional banks aggressively increasing lending to oil, gas, coal clients

US regional banks are aggressively increasing lending to oil, gas, and coal clients, capitalising on the retreat of European counterparts, as per a Reuters report.

Notably, banks such as Citizens Financial Group Inc., BOK Financial Corp., and Truist Securities Inc. have significantly advanced in the rankings for fossil-fuel lenders, with loans surging by over 70 per cent since 2022. Meanwhile, European banks like BNP Paribas SA and ING Groep NV are tightening restrictions amidst climate concerns and legal battles.

This trend underscores a significant shift in the banking landscape, as US institutions step up to fill the void left by their European counterparts. Despite mounting pressure from environmental regulations and climate litigation, US banks are driven by lucrative opportunities and supportive state legislation. Smaller players like Fifth Third are also joining the fray, illustrating a broader divergence in global banking strategies regarding fossil-fuel financing.

While some major banks scale back their involvement, private credit managers are increasingly entering the arena, ensuring continued financing for the industry. This dynamic suggests that even as traditional banking institutions distance themselves from fossil fuels, alternative financing sources are readily available.