The strong results posted by Royal Bank of Canada on Thursday illustrate how the banking industry is managing to maintain profitability despite extremely difficult conditions for core lending. But as good as Royal’s bottom line looks now, investors should expect some rough seas ahead.

The problem faced by all lenders is the drastic decline in long-term interest rates over the past couple of years. This has crippled banks’ ability to generate profits from their traditional business of borrowing short and lending long.