Canada Bank Results Seen Hit by Expenses, Strained Consumers
- Strong economic data could prompt more central bank rate hikes
- Non-interest expenses seen rising 12% so far this year
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After months of underperforming the broader market, Canada’s Big Six banks are likely to continue struggling as expenses and loan-loss provisions rise and consumer finances deteriorate.
Higher interest rates are expected to hurt lenders’ fiscal third-quarter earnings when they begin to report Thursday. Inflation data on both sides of the border have ratcheted up bets that central banks could raise rates further still, which would further erode spending power and borrowing demand. Analysts expect that higher rates could have banks bracing for elevated funding costs and lagging loan growth.