Provincial lender ATB Financial has seen its annual profit slump amid growing loan defaults in the energy sector. The Crown-owned bank has been forced to increase provision for bad loans by 400 per cent.

Annual net income for 2015-16 fell to $108.1 million with loan-loss provisions of $387.6 million. The previous year had produced record profits of $328.7 million.

While the main losses were in the commercial sector, ATB also reported a rise in consumer loan defaults. Overall, its loan book was strong for the year, rising 7.1 per cent to $40.4 billion. 

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