The central banks of Canada and the U.S. are expected to start raising rates in March, so analysts will be watching for any outlook changes from Canadian banks on how they expect the higher rates to play out, Scotiabank analyst Meny Grauman said in a note.
RBC analyst Darko Mihelic said in a note that bank CEOs have so far been saying inflation risk is manageable, but he'll be looking for any change in tone given recent inflation data and the rising costs U.S. banks reported in January. For 2022 as a whole, he expects core earnings-per-share growth of six per cent, driven by rising interest rates, improved loan growth and solid credit quality.
“The key risks to our outlook include COVID, as well as the prospect that rate increases trigger a recession, but we view those risks as relatively modest and believe that the positives continue to outweigh the negatives at this stage in the cycle.”