WRAPUP 3-Nordea, Handelsbanken Q3 raise Nordic loan hopes

* Nordea Q3 op profit 832 million euros, beats forecast

* Loan losses lower than expected, shares gain 2 percent

* Handelsbanken Q3 op profit 3.3 bln crowns, vs 2.9 bn fcast

* Nordea shares up 2%, while bank sector index down 2.3%

* Handelsbanken shares down 3.6%

STOCKHOLM, Oct 28 - Top Nordic bank Nordea and Swedish rival Handelsbanken beat expectations with their third-quarter profits, raising hopes that the tide could be turning as their loan losses landed below forecasts.

Nordea echoed the cautiously optimistic tone on loans that other Nordic banks have taken, saying bad loans were rising at a slower pace as economic trends in its home markets stabilised.

But Chief Executive Officer Christian Clausen said it was difficult to say whether credit losses would be lower next year.

"There is a big tail on loan losses in a recession, so even though we now see economic growth starting to come on, it's very uncertain how the loan losses are coming out," he told Reuters.

The global financial crisis hasn't spared Nordic banks, particularly those with big loan portfolios in Latvia, Lithuania and Estonia, which have suffered especially deep economic contractions measured in double-digit percentages.

Nordea has been shielded somewhat by its lower exposure to the Baltics -- the region makes up only 3 percent of its total lending -- than rivals Swedbank and SEB.

The bank has no official view on a possible currency devaluation in the Baltics, but Clausen said it remained prepared for all possible scenarios.

It forecast full-year losses from lending would be similar to last year, while third-quarter net losses of 358 million euros were nearly 30 percent smaller than market forecasts.

Matti Ahokas, analyst at Handelsbanken Capital Markets, said the Nordea results looked strong. "The expectations were probably higher due to the good credit quality of the companies that have reported so far. It looks like a very stable set of results -- strong on all lines."

SHIFT MAY BE UNDERWAY

Sweden's Handelsbanken also beat forecasts with its 3.3 billion Swedish crown ($478 million) third-quarter operating profit, as loan losses of 866 million crowns were well below the expected 1.3 billion.

"Both these banks stand out in terms of strong top/bottom line performance and good book value growth in contrast to the Baltic-exposed banks," Nomura said in a note, adding that this difference underlined its "reduce" rating on SEB and Swedbank.

Handelsbanken Chief Executive Par Boman said his bank's credit quality in the third quarter had improved but declined to offer any forecasts on future loan losses. The bank has no Baltic exposure.

"We have lower credit losses than other Swedish banks, but from our perspective they are irritatingly high," he said.

By 1200 GMT, Nordea shares had gained 2 percent to 75.90 crowns, but Handelsbanken was down 3.6 percent at 185.90 crowns, along with a weak DJ Stoxx index of European banking stocks, which was down 2.3 percent.

One trader said Handelsbanken's loan loss performance was good, but it was cancelled out by lower net gains on financial items than expected, without any one-off items to explain it.

Swedbank last week reported slower loan losses and SEB profit beat forecasts.

The head of Norway's biggest bank, DnB NOR, said he hoped losses in the Baltics had peaked, though the outlook there remained one of "great uncertainty".

Investors have been rattled by worries over possible devaluations across the Baltics, but there are some signs that the dire situation could be easing.

Data this week showed Lithuania's economy shrank 14.3 percent year-on-year in the third quarter, less than forecast, and had grown on a quarterly basis.