Swedish banking group Swedbank, the biggest lender in the Baltics, on Thursday poster a better-than-expected profit as loan losses fell drastically.

“Swedbank’s positive trend from the first two quarters was further strengthened during the third quarter. Net interest income improved, Baltic Banking reported a profit again and the business activity with our customers was good”, Swedbank’s CEO Michael Wolf said.

The bank also repeated that it expected profits to improve and to make a full-year profit.

Swedbank reported a profit for the third quarter of 2.6 billion kronor, compared with a profit of 1.6 billion kronor in the second quarter. Operating profit swelled to 3.2 billion kronor against a mean forecast for 2.1 billion seen in a Reuters poll of analysts.

Loan losses were 120 million kronor; much smaller than expected and smaller than during the second quarter.

Net interest income, which increased by 5 percent to 3,980 million kronor, also made a positive contribution to the improved results, the bank said. Factors like rising market interest rates in Sweden in particular and decreased costs for local funding in the Baltic countries had a positive impact on net interest income during the quarter.