You can read more of Big Deals, the Globe's exclusive report on mergers and acquisitions,  here.

After two busy years of lending, banks are hoping for a fresh spree of mergers and acquisitions to boost loan volumes as demand for refinancing tempers.

If the deals don't come through, it may be hard for the banks to exceed, or even meet, the record loan volumes set in 2011 and 2012.

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The lending arms of five of the Big Six banks have grown in size – and profitability – over the past few years as cheap credit encouraged companies to borrow. But as the number of companies refinancing their debts tapers off, banks will be highly dependent on lending to deal makers.

"Companies know the financing is there for them, it's just a matter of the value proposition – whether or not they want to pay up for assets," said Mark Chandler, head of Canadian syndicated and leveraged finance at RBC Dominion Securities Inc.

Concerned about the slow economies in Europe and the United States, many companies sought to extend their financing early in 2011, which led to a record year of debt arranging for banks. Many had doubts that the demand could be sustained in 2012. Spread levels in Canada have been relatively flat since December, 2011, and that offers companies little incentive to pay fees to roll the loans out further.

But lenders were pleasantly surprised that demand for bank debt, propelled by higher levels of M&A in sectors such as energy and real estate, drove total loan volumes to a new record of $181-billion in 2012, according to Thomson Reuters PLC.

Depending on the strength of the market, these deals can add $50-billion to $100-billion of

incremental financing opportunity, according to industry executives.

"What caused the spike in the market last year was the M&A that was additive to the refinancing market," said Marc St-Onge, head of corporate credit products in Canada at CIBC.

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The top investment bank for loans last year was CIBC World Markets with $35.5-billion arranged on 122 deals, up from its third place rank last year.

Close behind was TD Securities, with a deal volume of $34.5-billion.

Both banks ranked ahead of RBC Dominion Securities – the top lender of 2011 – who arranged $27.9-billion in loans for clients. The rankings give credit to lead arrangers for Canadian syndicated loans on a pro rata basis.

After two blockbuster years, can lenders hit a new peak this year?

The answer could hinge on deal-making activity in the energy sector, which, along with utilities, accounted for roughly half of loan market volumes in 2012.

Mr. St-Onge is optimistic.

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"I think in 2013, we'll see more of the same. Certainly the pipeline in the first few months of the year – very strong M&A activity in the natural resource sectors."

Glenn Gibson, global head of credit capital markets at TD Securities, sees another trend in energy.

"I think one of the trends we've seen that can continue into 2013 is private equity's interest in the space," he said, pointing to investment within Canada and from the United States.

Mr. Gibson expects to see continued activity in shale gas as investors bet on a rebound a few years down the road.

But energy isn't the only hot spot. As interest rates hover at or near historic lows, real estate may continue to be a boon for lenders.

And some of the banks are betting their lending units will get help from other markets.

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RBC, for example, has spent the past few years building its U.S. platform, benefiting from Canada's reputation for economic stability and experience in metals and mining.

"It helped [RBC] when a lot of banks [in the U.S.] ran into trouble," said Mr. Chandler, noting the bank's strong balance sheet was a benefit. "And it was helpful to be there on the ground floor to grow that business."

Combined loan volumes in Canada and the U.S. has moved the bank up the global league tables.

But either way, deals will be king. "I think the only way we'd exceed 2012 volumes is if we saw a better M&A market," he said.

Editor's note: Marc St-Onge's title has been corrected in the online version of this story.