Canadian banks’ profits seen pressured by slower deal making, mortgage growth

has gained about 9 per cent while the broader Toronto Stock Exchange’s index has risen 2.2 per cent.

Those dynamics, among others, have forced Bay Street analysts to lower their estimates but have largely maintained their rating to reflect the banks’ reputation as safe havens owing to their strong capital position and reserve levels.RBC analyst Darko Mihelic forecast a 9 per cent third-quarter revenue decline from a year ago for the capital-market business of the large Canadian banks. He also forecast total provisions for credit losses to increase about 8 per cent from the prior quarter to $2.

Investors will also watch for any updates on Bank of Nova Scotia’s turnaround plan for its international business.

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Canadian banks' profits seen pressured by slower dealmaking, mortgage growthCanada's big bank results are expected to bring to light a number of challenges as lenders set aside more funds for bad loans in a tough economy that has also led to a slowdown in dealmaking and forced borrowers to rethink about new mortgages. 'We expect another challenging quarter for the group,' KBW analyst Mike Rizvanovic said, adding that he expects slowing loan growth, higher expenses and higher provisions for credit losses. The shares of the top five banks - Royal Bank of Canada, TD Bank, Bank of Montreal, Bank of Nova Scotia and CIBC - have lost between 2% and 8% so far this year.
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