WRAPUP 2-Canada banks beat expectations, but bad loans rise

* Four big banks top forecasts, after charges

* All increase provisions for bad loans

* Analysts question sustainability of revenue growth

* Shares of TD, Scotiabank, National rise; CIBC drops (Recasts with Scotiabank results)

By Andrea Hopkins

TORONTO, May 28 (Reuters) - Four of Canada's largest banks reported stronger-than-expected results on Thursday even as they set aside more money to cover bad loans, sending shares for three of the four higher.

Toronto-Dominion Bank (TD.TO: Quote, Profile, Research), Bank of Nova Scotia (BNS.TO: Quote, Profile, Research) and National Bank of Canada (NA.TO: Quote, Profile, Research) all notched results that were slightly higher than analysts had expected, and their shares climbed in early afternoon trade.

Core earnings at Canadian Imperial Bank of Commerce (CM.TO: Quote, Profile, Research) also beat estimates, but its results were marred by a raft of writedowns and observers worried the nation's fifth-largest bank had lost momentum in its key retail operations.

Overall, analysts said the banks continued to outshine global competitors, with strong capital cushions and success in the kind of "plain vanilla" consumer and business banking the lenders are counting on to overcome rising loan problems.