This week brings the beginning of bank earnings season, and the best thing investors can probably hope for is a boring one.

In recent quarters, the big surprises have generally been of the unhappy variety, such as the earnings misses by RBC

For the fourth quarter ended Oct. 31, the general consensus is that Canada's largest banks will report better results driven by their bread-and-butter business of lending money, as an improving economy means they have to set aside less for bad loans. The result should be earnings growth on the order of 7 to 10 per cent over the final quarter of 2009, analysts said.

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"In financial services you don't want excitement these days," said John Aiken, bank analyst at Barclays Capital, who said he expects a "a solid but not spectacular quarter."

The banks are facing slowing growth in their lending businesses. Credit quality is unlikely to continue to improve at the same rate it has been. What's more, the signs point to significant cooling in mortgage demand as the housing market slows, and mortgages are the biggest category of loans at Canadian banks.

"The slowdown in housing starts and recent softening of housing prices are of particular interest," Mario Mendonca, the bank analyst at Canaccord Genuity, said in his fourth-quarter earnings preview.

Banks that are most dependent on Canada, such as CIBC could suffer in that environment.

Banks with exposure to the U.S. may be able to eke out some improvement there to offset slowing in Canada. That would include lenders such as TD Bank

"Banks with U.S. exposure on [the]credit side could surprise on the upside," Mr. Aiken said. "For U.S. banks the third quarter was a mixed bag but there were some signs of a more decent credit experience and some signs of volume growth."

The biggest wild card remains trading. In general, analysts and investors expect banks' trading operations to post better numbers than in the third quarter. How much better, though, is hard to say because forecasting with any accuracy is tough.

The bank with the potential for the biggest bounce-back in trading revenue is likely RBC, because it had such a big fall. The bank reported a $1.35-billion drop in capital market sales and trading revenue in the third quarter.

"Royal becomes the dark horse now," Mr. Aiken said in an interview. "There's a little of an upside surprise [possible[ on that front."

The biggest unexpected gift for bank stockholders would likely be a dividend increase. But analysts say that's not likely just yet. It's probably going to be at least another quarter before banks are ready to crank up payouts, and even then just a couple are ready, Mr. Mendonca said.

"On the numbers alone, it would appear that only National Bank [Bank of Canada]and TD [Toronto-Dominion Bank]are in a position to talk about raising dividends" in the next quarter, he said.

Then again, the banks could always have a surprise in store.

"We always think it's not exciting going into the quarter, but then something comes out of the blue," said Mr. Aiken.