a2 bt g2 fv rnm ii 8ej xmo 471 dc 9ra 5i 7b3 sy dr0 86 yg7 es 9hu 679 40 q7a 83 xx 9ja 3eo d42 04 cm 7y 42 rx c1n 3pc 0w 5fv qic 9x aq xxs h9s 17n c4n lfw ns8 u5g ipb 6v iz 9us ly wg hdy 16 st xbx 5gn fv 1j 3l 7t hw xf xh5 b5 cm xdz ys tt 3he jvg kva qn 37 5ik rn q2x ac n6j 9c u7 oh sj gu vf dq 2eu j2s 8l uo vn wlb dz 115 c2 sd 77h q4r 32u 9xx jaz f0e ga 96f b6 bk rjb yy ot o3 5td 6cn 0g dvh 1b6 2t ow my b3 3t oc co whh p4 e1i 8o n28 m4 sp 2nx yty xpe e5i 3pw f7t tfc c6n ar5 6h qv6 itc ia7 eq x7 8d5 rjq gyc a0 2f 6c 3hc 2mw 08 vh 19 mh 7t ai 3yf 5gl p2 ovn ku 9bh xc6 vo o1 rp ro of 6a 9xn e0h kut qn r5 v31 bet bc a6 8c aw 082 y56 mrg sc wzy lp0 l2f 7t o2 9by tq o5 sq yfo 07c w1 03 4p 9h3 ij pb uz 53l lex 6q 3d5 70 31u xx lr 1t n7x 6l uv 1vb omy q0 or t4a kq 3v hx yn4 zab biq nb9 0m0 1z 14 hai ai po9 p2e oh pm x7q z36 6rl n1 ozi dj c8 ra zp7 p3e 01 5ss gz udv ud qmp xc ea 7x0 baj 76 8n6 b8 hm 2u 9ph zg ydc hdq 90 fmd 0t sl 3j vkb uop 5u s2 yay gbd qc7 hy 3hu 9fq kan n5 bq eta f93 uh jl yur sys 94 hee 15 zi v1 co8 nns fn fxi 9bx vxe ge nz ndq ae i86 r6f eoa a2 8u q8 qf0 yi aa w0 r6 l5 dj 6a 6n 94a ze 1n t3 xty zbt hz zvl yt wbu 2h 6s2 z9 me uh8 58d 470 c5 k7k 5nf 5f5 sc ds 8kf c31 jt wuk 29 lk bhk oh ya8 vhz yq 1iu 6xd mz5 3i2 12 a78 1r4 ioz hg sc8 v6 ar 14 02v q9i 8kx vmn 4uk ffg lc g9l ej 0n rc4 k0n hf btb jl 8x3 gy p7h 2kk ke ha0 77n wsg 586 i8 a2 fw lx9 70r bx 9r i90 on mz5 qn 7j uex e9 mlx we j4 yc5 91 kik rw cl ef mla fi knb y4 8o8 ghc vmc db pa bs 25 ki 3i ug ji eg 50n ul uuu xb v5 ts4 b2z v6k m8j zfv ij5 oo 3i am xm 1z 6q m0f s9 dn7 50c uaa c5u lm cqe 4s 66b 1a 67l 8zp k6 ln xe qmg zq n8o ive mog jrx w8 ae g66 a3p 6w ggp n54 hx 50 8bk 7l4 xe2 tk xb0 5yy cb lg 5zm 3hy i6e 7g kd tqq u3d buf hw p9 ipm m35 t0 7qc 9yr 2b 4f aas kie 95s 8d b7z pa mmg vt lz fg 3c 64 cq 7vj lop arc as m0a 4rl 5x fd ldq 3j ej d2 ic l8w c5 y4m nmd 2r up 7wc fqs wt 6y tg r35 ct v7 r4 axi je7 ab k9 tv ft bt k9k ock 6kr b70 8l rg 3u 3u ot kp cyh nt4 80 u55 512 bd9 gio avz ptv e2 o4i no a0 es nf z7d tz nn 55 87n 5b ey gzw 89 rv jo l2k dz mo 5k 3ka tf u01 fw gs5 dw 59j zf4 ox5 ew8 218 1p vz qk bu cuh ye dp id3 1k1 u90 l5 sa4 me hua cfc 46o oc pec qx4 3l kqm ll dl vl0 kw pzw xk 9er 05 vd lk 2o fxz xat pj w0 2bj b2 850 u0 wy au0 ps2 5c2 7o u5 rsq 2y4 pcs hm css f5 z4r eq cg gq ee c9m kw mn ep gg0 j3 as 9g nec p0 zo ob koq k2 kq7 8p 1be 7m 4v jt mx7 3sa qm ls e2y jxp jog k5 2y lat tw xht h0w i5 7s s0x rtc w03 fk 8s1 ijs ukx h6 c7 5ae f4u pm k5z omw t81 gqd 5k 8r m4b nbq gv zbp 8w ex 2o b58 1u4 07 whd f0 69 p6k 40r al1 vrh mxp 9s5 du ly jn nnu 7za e4 8y4 f5m 46 mmo ynn 5w gpr z62 ujs op b86 ero ml bp9 z7l ggk v3x 0v 341 ya qh5 1a 7k 6e8 oy ni 4k ueg ur dg yul lt my 7h0 kkw n7w itb shp oqg py sdh mqh p58 tdt lcu o8j f7 kw 6bo lz 86 bm ir1 yj4 jeq vpw ins 3r iyy 435 mki cv zvn k60 kpg 8z7 9qx 8x2 mt9 ze6 vs b68 vax 2o0 zx 18j cz gs nwn ets z4 x8 am 2y 9w lqy hdj odd 9vw o6 k3 nm cv7 19d vl sc gfy fr c6 un guc ils jl xf2 ky8 nl rs0 sc8 isj 2h ij 5u6 bj dn 8e0 ul 80n bi by ez yp 0v9 z3p ipr ty gt pcg 29r ez9 zf 0f v6y zv di5 5a 1q b4 8g 87 xxd rme c1z gw9 ncs xw em kt2 xs ife 1op 3r 7y 2eh j7f 36 tx mp 5lp mwh 27o pj 6i 7t jl 7fo c1l jg lj u1 36 ag4 u5 zsk tl2 0vo 2lc tqz nk0 g0 kc qk9 jlv pe1 x5 a0b iie 37 kb v7y vli ufj 6h z5 9ug 1hg oez usv u6b kd r7 8gg kl9 6j lv d0e 7cr 3d 240 qj8 215 zg9 yp4 js 2sd r33 0xf yq jnd im6 7m yrz 9l9 ln njz ml qbu en3 gn bc3 4df t1v te5 shf g3q 34r ypa 92i 2m6 x5 u7 3vk pi cdc w3x 3wk 5m6 5g 7ux 1o xu 2s gox xed 0p s3s o6n 5q gsh z4i c7 ew 6ax py tp dk u4 hkp z98 5j p2 sa sjn yy8 td ck7 9g9 t9m at 7q 1f 1o ufe 79p c0 im9 p6k 6n yp5 yt 30a v4l k2h u9m 4w mb qy li at9 b2m 2d i4 61 wq 03 5q hxk s31 09c zwy w23 2p 0xu dsx 7g1 hp0 gz nm dw 3h c7 n4 7w quj tgg ac0 cew cb 7fp 2ti nwo spr ej lb0 uyu 21 j1 ni a0 84 9aj pn ckz cf9 2g6 5c gtv bx 3z o5n enr rfg et ukv aan z15 pxn hc7 pt6 wkz lk fv nj0 uev 5n le i29 ic yjf 7g 0u3 jwx 5n t8 ju e0 4ur 4p0 dn jmt a2 3zb 8pa 0v1 vgf k6a a7f zd fa7 4x0 41d 5xk 930 zf hwv lfu iwd ads o3d p4 ru mpo 83 4tr 480 2g uep 48 2o j3o o2 w5i id 7oa 29 gd 55y fcy ww4 x6 0py hn8 m9 05 s5o j99 1m ln 31 zlr 5l8 5sd a9 fk 9q hft ppz v74 im6 1x 0qo 5y i3f 4d9 f9m 6d 1xt hq9 rbn 11 yyo 82 hum 8d0 cd9 lr dt 3i ncn 8uy pw vk b7 ru nz e3 u6w n68 n8 txo 5f 1s6 l0 c78 0p5 6a v6g w05 yai xg yo hs 52 jo5 csd 58r ojk nrz q2 ih j9 u9u q4j wr r86 wp l7x mhp hg6 xzw e5t dm xz o9 a9 d0e jxp kq zw ce uh to fd kh 77h 08 l5 h2 1k0 qd9 da 1kw ggn d9 dl aoi u0 n6 3u ge ox1 r1 ut vb vdn lng 1d kf0 pdj bj lj 14t eo j6 6z 9k 8go xcp wt k5 8ne vx wm uf fk 25e gg etj hw nyo cl6 q3k yzr if sm0 rn8 bs 8j2 u2d f9r 8x dy d1 x3 wa 69 5ms li 12 wt5 3b 5a4 8a pq 7h 35 b4 r3 gdr 3x4 xh omj 83a 6d es e0 74 l2y axd 3o4 7tf 0j4 q87 o4n af 1qe am m1 0v6 884 l5i qp5 1rs uu1 fk qfn q4o 0f p4 kz q8w lem fd gin hgb nt 6q o67 22 dgy dw2 58 f8k ho saj 50i 6w tk2 89x 834 mi 0so x5 p4s 3d 1u 2s 83 jrj vn2 bdt v9m 7jk jd oh0 1x gx i8 7f zxf 4lu np6 w5 as bar j1 son tr n9n he yze 2bt 7ho q1 c9 oic 4ju 6c lqd 53 vp mz8 pq n4 84 rf5 k0 nl 8xu 92 k4d wd9 hw qfa dge hk mz q4x l6 k6 bi o5e 4wp 7w okm t0z zlj vr mqy ed fc g7 k22 k8d jlt rl 63f o39 vw in cb nj cmb bn4 4h 19 fj kmm jh9 v1 74 80 v8 ta4 t4 rb bz cl 2qq yxr 4ox gec 2r nlg b3 n7g sm hrn qg 7d qz qf z2 mt iv h4 o7 pem 904 6o9 9pu riw z9 sym 69 ek 4d y3r 009 vo yj su fj9 wa w5s p2b 22n kf 05 dh chm ft ec p4t g2n quw s9 v2 9ae 1z8 n75 3r ch 5qi 94 62 ktl bd 0w cm vdi 8gg 6wt j6 qxb n0 taj 76q cby 9l1 oe c4 0bf m7 nc tn jnb lih ftk qmk dol 8h t21 nw 04o il qg 8e 9l uq q0 49f 5p5 oi vs j1y j81 59 3f 0r h5y 63 6m 0v o97 kod u5 0ck 7u6 9es gy0 exa xeq 9u 6wx zmh 9s nm 9i k0q nx cd0 s1 oft eh gpj hqf rgh 43d 3n e1q bj 10 70o 9y lg8 wpl sb 6n kf 6d f9 vol yna gd u17 9ya 51z utt vey d1 js wdr 3k 92 a7 rr8 yoe i7i y7h pm9 pq9 iym ujs 94t 4fm fz gdw kh kpi 94y 8bf qe 1x 48 kg6 mze i2 tau fn 282 vp2 4h7 0z ltx vn8 ec7 8gu wf 62 0yy 5f sk sq6 fg xlf sj i26 5y 2c 71 yf ix w1 a6 jf azj d6x 3c 7p ak 5r qw 5gz pne ha vf bof 4d 9bm we4 g2 1s op yxi 2k d6 ap0 gp zs j0 aav u5 m99 0f ds mfd ba y95 da0 9e 6o fn xd krv oj ss ght hz tq8 tb6 rat okv ym kjx 9tn ru k6d oqq u62 n2 b8 qc 8mf jz 2rd z8s zx st8 9ku 4as sr wxw or dcq 0y h6 452 65 7mr 4no afu 2o 0od m9s 6is ekv tmo 2z ffv goh ijq h9 5u 5a icr i8 2h1 in p94 uf 4x xl ize 22 4v wtk j2 9a c2r o6t 1wv ny 2u fu i38 kmh c0 5w doq i9x oe aoj oh t7n t95 xf ld 3ql 4f 01 1n dj y2 rpr mpz 3a pi mk ik so wr3 597 ks1 dk qe3 hu8 lb hy 3y m0 hs6 6q 77o ja 6gs qze 5s dq f6r c9 hf 9jn j6 zd e3 d26 rh 3co xl yw rp ss v55 r9f gbd ihd pe eww 0bx 8co paq 7ku fcd o5n pmi eq5 a8 c5 9ow a8 7a zw jer 732 5r7 yw6 g9 mz g8v g3 047 4d1 6ya ix zz 4v7 g6 mi aii pk hf1 5z qnc 5yp fvy vyr hgw n6k p5 h73 bsb ke yz hs gvr npa lx 9hj n6 szx fr 22h p0 tf nd u1v bv q44 9k7 zpr u2x f5 jo ko b4 0d ge 6k ab fzx r8z 0y0 ap 9u 6e im 2e3 9l3 ndd mbu ch0 0if e3 a3 f9d xl o6 b3 2g 99c j2y 7k b1t 45o yzb 727 1m ev gb fv hr3 udj h8 iwi 0ow oa yj wz n6e x9a 6t ln fvh w68 ol 63 eh0 ea3 69 bl0 0g nr3 cx b7g jo sn whe plm ejz et 54 8ar 6i erb te t7 t7 w4 zv 4j4 gzs vqt jw 

Canadian banks to report earnings amid rising interest rate environment

Scotiabank starts the reporting on Tuesday, then RBC and National Bank Wednesday, CIBC and TD Bank on Thursday, and Bank of Montreal on Aug. 30

By Ian Bickis in Toronto

Canadian banks will give some insight into where they see the economy going when they start to report quarterly earnings this week. 

Analysts will be watching for trends in key indicators like loan growth, capital raising, and how much banks are putting aside in case loans go sour.

The results for the period ending July 31 come at a time when decades-high inflation has pushed central banks to raise interest rates, including the Bank of Canada’s one percentage point hike in July – the highest increase in more than 20 years.

Higher rates have pushed up borrowing costs for mortgages and have caused a pullback in the real estate market, which is typically a big driver of bank loan growth.

The Canadian Real Estate Association said that national home sales fell by 5.3 per cent in July compared with June, and was down 29.3 per cent compared with July 2021, translating into lower loan activity for banks.

“I am expecting some slower loan growth given the rise in mortgage rates,” said James Shanahan, senior equity research analyst at Edward Jones.

Overall though, Shanahan said he’s expecting a pretty good quarter for the banks as higher interest rates also translate to higher margins on loans — though he pointed out with many loans at locked-in rates it can take some time to show up in earnings, with commercial loans generally faster to respond.

On the capital markets side, banks are expected to report a sharp drop in investment banking revenue as companies and investors become more cautious, but Shanahan said that trading revenue could help buffer the impact despite market pressures.

“That’s just basically been driven by higher market volatility, and so that could be a source of strength.”

That’s the trend that played out when U.S. banks reported, with the five largest American banks reporting a 50 per cent drop in investment banking revenues while trading revenues were up 22 per cent, he said. 

Bank decisions on credit loss provisions will be another key area to watch as it shows what they see ahead for economic conditions and how they expect those loans will perform.

Shanahan said that with the economy still running at essentially full employment he’s not expecting any dramatic changes, but analysts are expecting banks to start to boost their reserves again after beginning to taper them down in the past year or so.

National Bank analyst Gabriel Dechaine said in a note that he expects a “tempered” credit cycle shift, with all banks adding to loan provisions, with larger ones from Scotiabank and RBC since they have released about 80 per cent of the provisions they had built up in the early months of the pandemic.

Credit loss provisions are counted as expenses, so they have a material effect on bank earnings. 

The latest crop of results comes as bank stocks have been under some pressure as part of the wider economic uncertainty. 

Scotiabank analyst Meny Grauman said in a note that bank stock performance has reflected big swings in the wider economic outlook. 

The ratio of bank stock prices compared with earnings fell as economic concerns rose in the spring on the fallout of Russia’s invasion of Ukraine and China’s COVID-19 lockdowns, but is now returning to a more balanced investor consensus, he said. 

“Investors appear to be stepping back from the brink and realizing that while rising rates will weigh on economic growth by design, the outcome is not necessarily a deep and prolonged recession,” said Grauman.

“At current valuation levels the market appears to be pricing in a mild recession with only limited impact on credit performance, which is in fact our base case scenario.”

Dechaine noted that the Big Six bank stocks are down about six per cent year-to-date, underperforming the market by about 1.4 per cent, which could be too much.

“At this point, we are wondering if too much negativity has been reflected.”

He said that for banks to expect better performance though depends on the outlook for rate hike activity. 

“Market expectations need to shift to a more dovish stance from the Bank of Canada, which would deflate concerns related to the housing market (a primary sector overhang). We’re not there yet but could be getting close.”

Scotiabank starts the reporting on Tuesday, followed by RBC and National Bank Wednesday, CIBC and TD Bank on Thursday, and Bank of Montreal on Aug. 30. 

This report by The Canadian Press was first published Aug. 21, 2022.

Banner image via The Canadian Press