* Q3 op profit 2.8 bln SEK vs 2.1 bln seen in Reuters poll
* Credit loss recoveries 196 mln, vs fcast 580 mln loss
* Says Baltic turnaround even more visible today
* Says pick-up in Nordic corporate credit demand uncertain
(Adds details, CEO comment)
STOCKHOLM, Oct 28 (Reuters) - Swedish banking group SEB posted better-than-expected third-quarter operating profit on Thursday as the bank clawed back provisions for loan losses in the crisis-hit Baltic region.
Operating earnings in July through September were 2.8 billion Swedish crowns ($414 million), well above the 2.1 billion seen in a Reuters poll and four times the 702 million crowns reported in the same period a year ago.
Recoveries of credit provisions in the period amounted to 196 million crowns compared with the average poll forecast of further charges of 580 million and a sharp turnaround from the 639 million charge for loan losses in the previous quarter.
"The turnaround in the Baltic economies is even more visible today, and in combination with falling impaired loans, the Baltic operations are back in the black," Chief Executive Annika Falkengren said.
"The political determination in the region to resolve a challenging economic situation together with our solid work-out processes have led to falling non-performing loans," she added.
Risk-averse investors shunned Baltic-exposed players such as SEB and rival Swedbank during the financial crisis but have piled back into the shares as emerging market risk has receded with the global recovery.
Loan losses have shrunk as the banks scaled back their exposure to risky markets, while the banks have also been rewarded for their robust capital levels.
SEB's results follow forecast-beating earnings from the region's biggest lender Nordea, and from Swedbank and Handelsbanken, thanks mainly to stronger core income as the banks got some relief from rate hikes in Sweden.
However, like its Nordic peers, SEB was cautious about the outlook.
"As global macro imbalances continue to hamper a broad-based economic recovery, uncertainty as to the timing of the pick-up in corporate credit demand in the Nordic region remains," Falkengren said. (Reporting by Mia Shanley; Editing by Will Waterman) ($1=6.762 Swedish Crown)