Investors braced for pain as Canada’s big banks reported their first set of earnings since U.S. tariffs sent shockwaves through global markets. But on calls with analysts, executives at the Big Six said the picture isn’t as bleak as it could be—and they’ve even found ways to profit from the uncertainty.

Finding ways to pay the bills: As expected, all six major banks set more money aside to cover possible bad loans than they did last year in the second quarter. But to analysts’ surprise, many of them reported delinquent loans are stabilizing or falling. Aris Bogdaneris, group head of Canadian banking at Scotiabank, said customers are cutting spending, holding more cash and making other responsible decisions that are helping them meet their payment obligations. “People are just cautious,” he said.

Making lemonade: That cautiousness translated into less revenue from loans for some of the banks, but more deposits as consumers and businesses set aside more money for a rainy day. Scotiabank CEO Scott Thomson said deposits are up from last year “across most business lines.” TD Bank CFO Kelvin Vi Luan Tran said Canadian personal and business deposits were up by a respective four per cent and eight per cent year-on-year, while RBC CEO David McKay said that commercial deposits for the quarter rose 15 per cent. Meanwhile, lending wasn’t down across the board—average commercial net loans were up 22 per cent from last year, despite less demand from companies in the automotive, consumer discretionary and transportation sectors, McKay said.

Cashing in on the chaos: Another way Canada’s banks profited from the U.S.-led tariff war was by trading on it. Stock market volatility—of which there has been plenty in recent months—presents an opportunity to profit from short-term price swings. CIBC, National Bank and Scotiabank all reported year-on-year increases in net income from their capital markets divisions, with National Bank’s rising a whopping 56 per cent. Étienne Dubuc, National Bank’s executive vice-president of financial markets, said the period following U.S. President Donald Trump’s so-called “Liberation Day” tariff announcement in April “were a couple of the most profitable days in the history of the franchise” because of trades the bank made to cash in on the resulting volatility.

Maybe it won’t be so bad: Economists are predicting a recession or flat growth for Canada this year, but bank executives expressed cautious optimism on earnings calls. TD chief risk officer Ajai Bambawale said the bank “is well-positioned to manage through this period,” thanks to the lender’s well-capitalized balance sheet and the money it set aside for bad loans. National Bank chief risk officer Jean-Sébastien Grisé said the institution feels “very comfortable with where we are right now” after modelling scenarios as pessimistic as a 5.4 per cent drop in GDP and a 9.6 per cent fall in unemployment.

Charles St-Arnaud, Alberta Central’s chief economist, said in an interview that banks have so far managed the stress of rising interest rates, inflation and the effect of tariffs well. But they haven’t yet been tested by widespread job losses, which could render people unable to pay back their loans even under the most flexible terms. “Then the question is, how does that then snowball through the rest of the economy?” he said.