Net income for the country’s six largest lenders is expected to fall 4.5 per cent to a combined $14.4 billion for their fiscal third quarter, according to the average of analysts’ estimates compiled by Bloomberg. It would be the first drop from a year earlier since the same quarter in 2020. Earnings reports start Tuesday, kicked off by Bank of Nova Scotia.
The banks’ set-asides for credit losses in the quarter ended July 31 are expected to swell to $1.71 billion, according to the estimates. That’s more than six times the amount in the previous quarter and a swing from $409 million in releases a year earlier. “Loan growth remains strong for now, however we expect a deceleration of growth in the coming quarters as demand for credit tempers with higher borrowing costs and a slowing economy,” Holden wrote.
“Investment-banking activities have ground to a halt,” Gabriel Dechaine, an analyst at National Bank of Canada, told clients. “However, as US bank results showed us, we could still see strong trading-revenue growth.”