Sweden's third larges bank sees a "clear improvement" in the Baltics.

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Skandinaviska Enskilda Banken, Sweden's third-biggest banks in terms of market capitalization, struck a cheerful tone Wednesday in its fourth-quarter reporting as asset quality in the Baltics are improving.

“During the year, we have established a strong financial position", said Annika Falkengren, chief executive officer at SEB. "Looking ahead, we see a clear improvement in the Baltic countries".

Operating earnings dived 85 percent to 564 million kronor ($76.25 million). Still, that was better than a mean forecast of a 330 million profit seen in a Reuters poll.

Net interest income came in far below expectations and shares dived almost 3 percent in morning trade at the Stockholm exchange.

Credit loss provisions amounted to 3.2 billion kronor, slightly lower than expected, of which the Baltic countries accounted for 82 percent.

"We are more confident in the macroeconomic stabilisation in the Baltic region. The past due volumes in all three countries have in principle stopped during the second half of 2009", Annika Falkengren said. "In the absence of any significant macroeconomic setback, the provision for credit losses should develop favorably during 2010"