Capital markets expected to drive Q1 bank earnings as loan growth lags

A general view of pedestrians crossing Bay St. in the financial district in Toronto. THE CANADIAN PRESS/Andrew Lahodynskyj

TORONTO — Analysts are expecting Canadian banks to show a boost to first-quarter earnings from areas like trading revenue, while loan growth is expected to be muted amid a still-tepid housing market.

Mortgage growth will likely remain low as real estate statistics show a still-slowing market, but analysts aren’t expecting bank loan books to deteriorate.

Banks built up provisions for potentially bad loans as interest rates rose, but have kept levels fairly steady in recent quarters despite the overhang of economic uncertainty.

RBC analyst Darko Mihelic says in a note that bank stocks are trading at elevated levels considering the relatively weak Canadian economic data.

He says capital markets could help boost bank earnings, but that any signs of trouble on revenue or provisions could throw off lofty bank valuations.

Scotiabank reports Tuesday, BMO Financial Group and National Bank of Canada are set to report their results on Wednesday while CIBC, TD Bank and Royal Bank of Canada are scheduled for Thursday.

This report by The Canadian Press was first published Feb. 23, 2026.

Ian Bickis, The Canadian Press