a royal bank of canada rbc logo is seen on bay street in the heart of the financial district in toronto january 22 2015 reutersmark blinch canada  tags businessfile photo toronto aug 18 reuters  canadian banks are expected to post declines in profits on average in the third quarter as a murky economic outlook drives up provisions for credit losses pcl while market turmoil pressures capital markets and wealth management results analysts and investors said the banks which will begin reporting quarterly results next wednesday will benefit from increased margins from higher interest rates while loan growth remains strong despite some slowing in mortgage lending helping offset declines elsewhere canadas big six banks  royal bank of canada ryto torontodominion bank tdto bank of nova scotia bnsto bank of montreal bmo bmoto canadian imperial bank of commerce cmto and national bank of canada nato  are expected to report an average drop of 37 in adjusted earnings per share eps from both the previous quarter and a year earlier most of the banks have beaten profit expectations over the past several quarters as assets under management and deals and trading revenues soared and pcls remained low offsetting pressure on margins from recordlow interest rates these are now reversing read more rising interest rates are a tailwind said brian madden chief investment officer at first avenue investment counsel who expects margins to go up five to six basis points across the group the offsetting headwind is provisions theyve been negative at many of the banks for five or six quarters which is not normal excluding provisions and taxes credit suisse analysts estimate average earnings growth of 6 from a year ago and 3 from the prior quarter banks may also slow the pace of share buybacks to preserve capital for a potential downturn barclays analysts said analysts expect the biggest eps reductions from a year earlier at rbc and bmo which have the largest capital markets businesses torontos stock index lost 10 during the banks fiscal third quarter gsptse scotiabank and td with smaller exposure to markets are expected to be the best performers investors and analysts are also expecting updates on major deals by bmo and td in the united states in particular the latters acquisition of first horizon fhnn which is expected to close by the end of november but could face regulatory challenges read more it will be a pretty inordinate and undue amount of political interference if it were blocked madden said ultimately it probably ends up closing but maybe it drags into 2023