Sweden’s biggest banks expected to post lower loan losses.

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Although emergency bills for last year still are expected to be grave, Swedbank, SEB and Nordea -- all heavily exposed to the troubled Baltics -- are likely to illustrate gleams of light when posting fourth-quarter earnings this week.

Analysts expect lower loan losses for the second consecutive quarter as Estonia, Latvia and Lithuania are leaving the immediate crisis behind.

"I think we will receive good news of the Baltic states, with smaller losses than expected," Francis Dallaire, banking analyst at Ohman, told business daily Dagens Industri. "The banks need no longer be so aggressive in their reserves for loan losses”.

Swedbank is on Tuesday morning the first bank to report earnings. Nordea and SEB follow Wednesday.