Banks Set to Report Earnings Strained by Economic Slowdown

Signs of economic slowdown are growing, and Canadian banks could add more evidence this upcoming week. The Big Six banks are set to report fourth quarter results that analysts expect to show lower earnings, more money set aside to cover bad loans, and hints of rising mortgage strain. The results come as economic growth has rolled to a near standstill over the last several months, the engine stalled after the Bank of Canada raised its key interest rate to five percent. Higher borrowing costs and more cautious banks mean that lending growth has slowed notably. “The key trend in the banking industry right now is really the decrease in lending across the Canadian market,” said Shilpa Mishra, managing director in BDO’s capital advisory services....