(Bloomberg) — Canada’s largest banks face declining earnings in the coming years as mortgage volumes shrink under new rules introduced by the federal government this week to tame the country’s housing market, according to analysts at Royal Bank of Canada.Darko Mihelic, an analyst at Royal Bank’s Capital Markets unit, slashed his projection for annual Canadian residential mortgage growth to 2.3 percent, about half the previous average assumed for Canadian banks. He also cut his earnings per share estimates for most of the nation’s largest lenders for 2017 and 2018, including Toronto-Dominion Bank and Bank of Nova Scotia.“The changes announced by the Department of Finance on Monday will likely impact the Canadian banks in the form of lower mortgage volumes,” Mihelic said in a report to clients Wednesday.Mihelic is among the first to lower earnings estimates for Canadian banks after Finance Minister Bill Morneau introduced measures on …
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