Sweden's fourth-biggest bank Swedbank posted its third consecutive quarterly net loss after heavy loan losses in the Baltics.

Swedbank, the largest lender in the Baltics, posted a a third-quarter loss of 3.34 billion kronor ($482 million) compared with a profit of 2.47 billion kronor a year ago. According to a SME Direkt poll analysts had forcast a loss of 2.1 billion kronor.

“The financial markets continued to stabilise during the third quarter and investors’ risk appetite has generally increased. However, the recession and financial crisis are far from over”, said the bank’s chief executive officer Michael Wolf in the report.

It was the third quarter in a row the bank has posted a large loss. The bank is deeply troubled by the double-digit contractions in the Baltic region. Loan losses, including provisions for possible future non-payment of borrowers' debts, amounted to 6.1 billion kronor, which was in line with expectations.

The bank said, however, that the amount of bad loans was slowing.

“We see signs in Baltic Banking that credit quality is no longer weakening at the same rate as before,” Swedbank said in the statement. “The level of new impaired loans was somewhat lower during the third quarter than in the second quarter and our forecast that new impaired loans will be lower during the second half of 2009 than the first half remains unchanged.”

Several analysts said the report highlighted an improvement in Baltic loan losses and the bank rose on the Stockholm stock exchange.

Stockholm-based SEB, the second-largest lender in the Baltics, publishes its third-quarter results on Tuesday.