Net profit fell by 45 percent in the last quarter of 2009 on the equivalent figure in 2008 to 2.52 billion kronor ($348 million) from 4.55 billion kronor 12 months earlier.

But generally the figures for the quarter were better than analysts had forecast mainly because loan losses were far lower than figures reported by Swedish competitors.

Analysts polled by Dow Jones Newswires had expected a net profit of 2.27 billion kronor.

For the whole of 2009, net profit fell by 16.0 percent to 10.24 billion kronor, and loan losses more than doubled to 3.40 billion kronor.

Handelsbanken is the second-biggest Swedish bank by capitalisation, and the only big Swedish bank to have improved its results in the first half of the year.

This was mainly because it has little exposure to Baltic countries which have been severely affected by the global economic crisis, in contrast to competitor banks Nordea, SEB and Swedbank which have taken big losses in the region.

Losses on lending activities fell by 1.0 percent to 691 million kronor, although the analysts polled had expected these losses to rise to 1.25 billion kronor.

In the third quarter, the bank had reported a 14.0-percent fall in net profit owing to bad loans caused by the economic crisis.

Shares in the bank were showing a slight rise of 0.1 percent to 191.70 kronor in early trading. The overall Swedish market showed a gain of 0.07 percent.