Sweden's Finance Minister brings hope to troubled banks.

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"The overall view of the situation in the Baltics -- Latvia, Estonia and Lithuania -- is that the situation is stabilising," Sweden's Finance Minister Anders Borg told Reuters. "The situation is considerably better than it was 3 months or 6 months ago."

The comment was good news for the three Swedish banks SEB, Swedbank and Nordea that are all heavily exposed to the troubled Baltic markets.

Earlier on Tuesday Swedbank posted a bigger-than-expected fourth-quarter loss but said it's likely to swing back into profit this year.

The same day statistics showed that Latvia's economy shrank almost 18 percent in the final quarter of 2009. The drop was however smaller than during the third quarter, indicating a step towards recovery.