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

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Canadian banks are set to report first-quarter results that analysts expect will show an earnings boost from trading as well as muted loan growth amid a still-tepid housing market.

Banks have been able to drive their earnings higher in recent quarters despite economic headwinds as their capital markets divisions have benefited from frothy stock markets and corporate activity.

The first quarter, which includes a bump from year-end trading...