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How Oil Prices Are Impacting The Banking Business: Cullen/Frost Bankers' Input

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It seems that the crude oil price slump has spared no one. Though cheap gas is wonderful for consumers and for a few sectors like retail, there are a host of companies dependent on the oil sector and other sectors that are contingent upon oil -- each of which can experience a negative impact with declining oil prices.

Dick Evans, CEO of Cullen/Frost Bankers, Inc. (NYSE: CFR), was recently on CNBC to discuss the impact of falling oil prices on his bank.

Related Link: Has The War On Gas Begun?

How Big Of A Concern Is This Decline?

Evans explained, “There is a lot of talk about [the decline in oil prices]; there is a panic. And I think this is no time to panic, no time to retreat.”

“I think, it’s going through an adjustment time[...]I think you got to look at the duration, too. How long is it going to stay at a certain price? And then we can kind of see where the activity is going to go,” Evans said.

How Does This Impact Customer Relations?

Evans said, “Certainly our customers are looking at their capital expenditure. How much drilling will they do next year?”

“As we go through that period of time, we are staying very close to our customers. Quite frankly, I am very comfortable with where we are.”

How Much Will A Long Low Influence CFR?

When asked about the significant impact if oil prices remain low for a long time, Evans said, “Well certainly [there will be an impact], but at the same time I think what hedging gives you: an opportunity to adjust. And if you are hedged, which many customers are through fifteen [2015] and part of sixteen [2016], you are going to be able to adjust the cost of your operation, your drilling and so I think, [the] main thing it does is it gives you time to adjust.”

Posted-In: Crude Oil Dick EvansCNBC Commodities Markets Media

 

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