Sweden’s four major banks came in above forecast as they posted first-quarter earnings, mainly on the back of significantly lower provisions for loan losses in the Baltics and recovering macro-economic climate.

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Handelsbanken, Nordea and SEB posted better-than-expected profits Wednesday morning. The previous day Sweden’s fourth biggest bank Swedbank, the largest lender in the Baltic states, said it swung to its first profit since the end of 2008.

Increased profits are mainly an affect of lower provisions for bad loans in the Baltics and more upbeat global macro-economic climate.

SEB’s credit loss provisions were 1.9 billion kronor ($263 million), much lower than forecast.

"Following the in-depth review of all credits in 2009, we remain confident in our Baltic asset quality and work-out strategy," SEB Chief Executive Annika Falkengren said in a statement.

Nordea said loan losses decreased 27 percent to 261 million euros. It now forecast a decline in credit losses this year.

“The improved business environment has contributed to a decrease of loan losses and a stabilization of the growth of impaired loans,” Nordea said. “Net loan losses in 2010 are likely to be lower than in 2009. Credit quality continues to stabilize, in line with the macroeconomic recovery.”

Compared to its Nordic peers Handelsbanken has been less affected by the credit crisis, mainly because of few operations in the Baltic states.

"Improved net fee and commission income and lower loan losses offset lower net gains on financial items," Handelsbanken said. "Household demand for the bank's services remained buoyant during the period, however, the weak economic cycle meant that demand for loans from the corporate sector was limited, particularly on the Swedish market."

Swedbank said Baltic impaired loans and loans overdue for more than 60 days have stopped rising. In Sweden, credit quality remained good and it can be noted that the credit culture is strong.

• Nordea, the largest lender in the Nordic region, said net income rose to 642 million euros ($848 million), from 626 million euros a year earlier.

• Svenska Handelsbanken, Sweden's second-largest lender by market value, said net income increased to 2.85 billion kronor ($392 million), from 2.77 billion kronor a year earlier.

• SEB said its first-quarter net profit fell 34 percent to 674 million kronor. It was well above the 224.6 million kronor seen in a Dow Jones poll.

• Swedbank posted a first-quarter profit of 536 million kronor ($74.7 million) from a loss of 3.36 billion kronor a year earlier. Analysts had been expecting a net loss of around 1.1 billion kronor in the latest quarter.