Canada's big banks are poised to deliver a strong quarter of double-digit profit growth when they begin reporting their fourth-quarter results on Tuesday.

Bank of Montreal will kick off the earnings parade. Thomson Financial says its survey of analysts suggests BMO will report a 14-per-cent increase in earnings per share (EPS) — to $1.26 per share.

Royal Bank and National Bank report their Q4 financials on Thursday, while the rest of the big six banks release their financials next week.

Thomson Financial's survey suggests that all the banks will better their Q4 2005 performance, with Royal Bank leading the way.   

In addition to higher earnings per share, several banks are expected to raise their dividends. Most banks pay out a third to half of their earnings as dividends to shareholders. At current prices, the banks' dividends now yield from 2.9 per cent to 3.5 per cent.

Steadily rising share prices and rising dividends have made bank stocks a favourite of many investors who like the steady income they can provide. Recent federal plans to bring in a new tax on income trusts as of 2011 has sparked even greater interest in the banking sector.

The TSX financial services index, which includes a broad selection of TSX-listed banks and insurance companies, is up more than 13 per cent so far this year and hit a record high just last week. 

For all of 2005, Canada's big six banks posted profits of almost $12 billion. They've already made more than that in the first nine months of fiscal 2006.