Canada’s six big banks will report earnings this Tuesday.
Analysts’ expectations are of modest gains, in the ballpark of 2 per cent, as we wait and see how their respective final quarters fare.
It has been a year with lower, but steady oil prices, and a housing market that has moderated on the West Coast so certainly there will be factors that aren’t as supportive for Canadian financials bottom lines.
What will be of interest with the banks this quarter though will be their outlook – if any offered – with the recent uptick in interest rates in the U.S., which is certainly what U.S. financial institutions have been holding their breath for.
Banks benefit from a steeper yield curve, simply explained the difference between short and longer duration borrowing rates. That in turn, helps to make their loans more profitable and better for margins.