Three of Canada's largest lenders announced quarterly profits on Thursday, and as was the case with Scotiabank earlier in the week, they are all setting aside a lot of money to cover loans that might go bad.

Royal Bank, TD Bank, and CIBC revealed their financial results to investors before the stock markets opened on Thursday, and while all three remain highly profitable, they all showed a sharp increase in the amount of money they are allocating to cover bad loans, a closely watched banking measure known as credit loss provisions.

At Royal Bank, the largest bank in Canada allocated $720 million to cover loans that are currently not being repaid as planned, or the bank is concerned might not be repaid soon. This number rose by 89 percent from $381 million a year ago.

At TD, the bank set aside $878 million in provisions, up 42 percent from $617 million at this time last year.

As for CIBC, the bank allocated $541 million. This represents a 24 percent increase from last year’s level.

These figures come after Scotiabank earlier this week revealed it had set aside nearly $1.3 billion for potentially bad loans.

Profit increase...

While the rise in bad loans is a cause for concern, these figures are just a drop in the bucket when viewed against the overall financial picture at all three lenders.

At Royal Bank, the bank posted quarterly profits of $4.13 billion, up from $3.88 billion a year ago.

At TD, profits fell from $6.67 billion to $2.89 billion, but it also felt confident enough to raise its dividend payments to shareholders to $1.02 per share, up from 96 cents previously.

CIBC also raised its earnings to 90 cents per share, up from 87 cents, as its profits increased from $1.19 billion to $1.48 billion.