UPDATE 2-Nordea's Q1 beats forecasts, keeps 2009 outlook

* Q1 operating profit 833 mln euros, beats all forecasts

* Keeps 2009 outlook

* Says loan loss levels becoming harder to predict

* Shares up 6 pct

(Adds detail, CEO comment, share price reaction)

By Simon Johnson and Eva Odefalk

STOCKHOLM, April 29 (Reuters) - Nordic banking group Nordea (NDA.ST) posted a modest 5.9 percent fall in first-quarter profit on Wednesday and reiterated 2009 core profit would be roughly in line with last year, in spite of a deepening recession.

Nordea's relative buoyancy contrasted sharply with rivals Swedbank (SWEDa.ST) and SEB (SEBa.ST), which saw economic crisis in the Baltics cut a deep hole in their results. [ID:nLN150939] [ID:nLO417440]

First-quarter operating profit for Nordea, the Nordic region's biggest bank by value, fell to 833 million euros ($1.1 billion), from 885 million a year ago.

The figure easily beat the average forecast of 584 million in a Reuters poll and also the highest estimate of 784 million.

Chief Exective Christian Clausen said the company was focusing on risk, cost and capital, but wanted to keep growing.

"The underlying business momentum in Nordea is very high ... though we are facing difficult times," he said.

The bank's key risk-adjusted profit measure -- income minus expenses, expected loan losses and tax -- increased by 38 percent compared with the same quarter in 2008.

Shares in Nordea were up 6 percent at 0942 GMT, well ahead of the wider European banking index .SX7P.

"Its a good sign that they repeat their outlook, given the macroeconomic situation," said one analyst who declined to be identified.

Net interest income was in line with consenus and trading income strong, he said. "Costs seem to be under control and credit losses were, in principle, in line with expectations. I think it was a strong report."

RISING LOAN LOSSES

Like Swedbank, SEB and Handelsbanken (SHBa.ST), Nordea saw net loan losses rise to 356 million euros, up from losses of 21 million euros a year ago. But this was better than the market forecast of a 403 million euro loss.

In the Baltic region, where economies are expected to contract by more than 10 percent this year, Nordea's non-performing loans rose to 256 million euros, or 3.42 percent of lending.

Clausen said the situation in the Baltics was "very, very dark", but Nordea's loan portfolio was stronger than rivals'.

"The Baltic situation has been deteriorating. But we have been making provisions and think we are well provided for," he said.

Swedbank and SEB were forced to make large provisions in the first quarter to cover souring bad loans in the region.

Nordea said group loan losses -- at around 0.54 percent of total lending on an annualised basis -- were broadly in line with its expectations and forecast for the full year.

"The worsening of the macroeconomic trends has, however, increased uncertainty for loan losses for the remaining part of the year," the bank said.

Nordea's core net interest income and fees and commissions came in as expected by analysts. Howevever, trading income, which rose to 515 million euros, topped the average forecast of 301 million.

Clausen said the trading income had been exceptionally strong in the quarter as clients hedged against currency and interest rates changes. He added it was hard to say whether this level was sustainable. ($1 = 0.7683 euros) (Editing by Greg Mahlich and Simon Jessop)