Bank of Montreal and Bank of Nova Scotia, Canada’s third and fourth largest banks, missed analysts’ estimates for quarterly profit on Tuesday as they set aside more funds to cover for bad loans.

The results come as the Bank of Canada’s 10 interest rate hikes since last year have slowed the housing market, increased consumer debt and delayed mortgage repayments, forcing banks to set aside more money to protect against potential loan losses and restraining their earnings growth.

BMO, which bought U.S. regional lender Bank of the West earlier this year, said provision for credit losses rose to $492 million, compared with $136 million a year ago.

The bank’s earnings were also impacted by severance costs of $162 million and $83 million in legal provisions at its capital markets unit.

At Scotiabank, provision for credit losses jumped to $819 million, from $412 million.

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That hurt business at home for both banks, leading to a five per cent and 12 per cent fall in BMO and Scotia’s Canadian personal and commercial banking segment.

BMO’s U.S unit, however, grew helped by a strong dollar. Income from Scotiabank’s international business, which includes Mexico and other Latin American countries, fell eight per cent.

BMO reported adjusted net income of $2.04 billion, or $2.78 per share, in the three-months ending July 31, compared with $2.13 billion, or $3.09 apiece, a year earlier. Analysts had forecast $3.13 per share, according to Refinitiv data.

At Scotiabank, net income came in at $2.23 billion, compared with $2.61 billion. On a per share basis, the bank earned $1.73, a cent below analysts’ expectations.

($1 = 1.3609 Canadian dollars) (Reporting by Nivedita Balu in Toronto, Pritam Biswas and Sri Hari N S in Bengaluru; Editing by Shweta Agarwal, Bernadette Baum and Mike Harrison)