Banking sector worries ease ahead of Q1 results, but relief still a ways off

Stock markets may be hovering around record highs internationally, but Canadian bank shares haven't seen as much momentum as they head into first-quarter earnings results this week.

The sector has been lagging on concerns of sluggish loan growth, risks to existing loan portfolios and a range of other headwinds including changes to tax exemptions and capital requirements.

Some of the biggest fears are easing, but analysts say a turnaround isn’t expected any time soon.

“After many quarters of bearishness, we are getting much more constructive on the outlook for Canadian banks,” said Scotiabank analyst Meny Grauman in a client note.