UPDATE 3-Nordea says capital rules not set in stone

* Keeps profitability target ahead of new cap. rules

* Q4 op profit 1.03 bln euros, vs forecast 953 mln

* Loan losses bigger than expected

* Cuts dividend to 0.26 euro, from 0.29 euro

* Shares down 1.2 percent, outperforming index (Adds CEO quotes, graphic, updates share)

By Mia Shanley and Oskar von Bahr

STOCKHOLM, Jan 24 (Reuters) - Nordea, the Nordic region's biggest bank, said it would stay firm on its profitability target, which analysts have questioned as too high in the face of tough new capital requirements, at least until the ink on the rules had dried.

Sweden has taken a tough stance on capital regulations even though its banks have outperformed European peers, proposing that they hold 12 percent core tier one capital by 2015.

Nordea, which has the lowest core Tier One capital of the Swedish banks, falls short of that and analysts have said its 15 percent return on equity target looks high given the country's new capital hurdles.

Nordea Chief Executive Christian Clausen told Reuters he expected some "calibration" of rules in the months ahead.

"Just this week in Europe, there was a move towards looking over capital requirements, not to overdo them right now, when the economy is struggling," he said.

Clausen was referring to a Financial Times report on Monday which suggested France and Germany were pushing for a delay to implementing stricter Basel III bank capital requirements.

The European Commissioner in charge of financial regulation said he would stick strictly to the Basel III timetable.

But Clausen, who is also European Banking Federation President, believes these may be moving targets.

"The whole regulation is not carved in stone so therefore we are not changing the (profitability) target," he said.

Nordea posted a 4 percent drop year-on year in operating profit for the fourth quarter to 1.03 billion euros ($1.34 billion). But it topped a forecast for 953 million in a Reuters poll on strong trading results.

Shares rose in early trade though they later traded down 1.2 percent, outperforming a broader European banking index that was down 1.9 percent.

DIVIDEND CUT

Nordea, one of Europe's top 10 lenders, slashed its dividend by 10 percent from the previous year to 0.26 euro, paying out 40 percent of its net profit for the year even though its policy is that dividends should "exceed" that percentage.

Swedish banks have served as a safe haven during the European debt crisis, outperforming their regional peers by a good margin in the past year thanks to adequate levels of capital and robust regional growth.

But analysts say that dark clouds are rapidly approaching and that Nordic banks may start losing their appeal as the region starts to slow in the face of turbulent financial markets and a high risk of recession in the euro zone.

"2011 has been a turbulent year for states, banks and many of our customers. 2012 looks just as challenging," Clausen said.

The bank has been seen as increasingly vulnerable to developments in Denmark -- which may be headed for its second recession in less than a year -- and to the shipping sector, which suffers from overcapacity.

That was seen weighing on the outlook for some peers which report in the weeks ahead.

"Asset quality is a negative readacross for Danske and DNB," Nomura wrote in a note to clients.

Jyske Bank analyst Christian Hede wrote to clients that the result was a better-than-expected finish to "a very difficult year" but noted that writedowns were higher than forecast.

Net loan losses in the fourth quarter were 263 million euros compared with an expected 152 million. ($1 = 0.7665 euro) (Additional reporting by Mette Fraende in Copenhagen; Editing by Dan Lalor and Helen Massy-Beresford)