For months, many financial observers have said that Canadian banks have made lemons out of lemonade during this credit crisis and have been able to weather the storm better than their south-of-the-border counterparts.

That idea was put to the test this week, with each of the major Canadian banks slated to give quarterly earnings reports. On Tuesday, Bank of Montreal ( BMO) made its case, reporting a 44% drop in net income, but still beating analyst expectations. And today, three other banks gave up the goods, besting consensus estimates.

Bank of Nova Scotia ( BNS - Get Report) said its second quarter net income came in at C$872 million, or 81 Canadian cents. It's still down 11% for the year over period, but up 4% compared from the last quarter. The company increased its credit-loss provision to C$489 million from C$153 million a year ago, but shares still changed hands in positive territory by the end of the day. It finished at $34.02, up 26 cents from yesterday's close.

Investors really liked the news coming out of Toronto Dominion ( TD - Get Report), the country's second largest lender. They reported that revenue jumped 28% from the year over period to C$4.33 billion. EPS came to 68 Canadian cents on a profit of C$618 million, though that's down from C$852 million or C$1.12 per share from a year ago. Exclude certain charges and EPS came to C$1.23, which was well ahead of most analysts' projections.

Along with other adjustments, the company still took a C$134 million after-tax loss as a result of "economic hedges related to the reclassified available-for-sale debt securities portfolio." It also increased a set-aside for bad loans to C$656 million from C$232 million in the same quarter in 2008. Regardless, investors liked what they heard, pushing the company's share price up 7.3%. It finished the day at $48.30.

Bringing up the rear was Canadian Imperial Bank ( CM - Get Report). While still beating expectations, the bank posted a C$51 million net loss, which comes to 24 Canadian cents per share. That's better than the C$1.1 billion net loss the bank took at the same time last year, which came to a loss of C$3 per share.

By most accounts, Canadian Imperial had the most exposure to structured credit products, and it showed. The bank took a slew of writedowns, including a C$475 million item on structured credit activities. In total, the bank wrote down C$914 million, pretax. Exclude all the one-timers and the company said it went from red to black, earning C$1.44 per share. In total, the bank has taken around $10 billion in writedowns over the last two years.

"Losses in structured credit did impact our results, but the bulk of these losses occurred early in the quarter before market conditions improved," President and CEO Gerald McCaughey said in a statement. "The rate of deterioration in the broader economy appeared to slow and liquidity levels recovered during the quarter -- both of which are encouraging signs as we head into the last half of the year."

Shares of Canadian Imperial fell to $48.87, or a little over 4%, by the closing bell. Royal Bank of Canada ( RY), the country's largest bank, reports tomorrow.

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