Banks Mid-Earnings Cycle Update

RBC Capital Markets, 5 December 2006� Results Beat Consensus But Quality a Concern. Last week, 3 banks posted EPS and dividends above consensus. Still, investors were dissatisfied with underlying EPS, whether it was the low tax rate at BMO, excess trading & securities gains at NA or a combination of both at RY. Also notable was a rise in impaired loans and corporate loans. In our view, underlying