In the July to September period, Handelsbanken posted a 10 percent rise in net profit from the same quarter a year earlier, to 2.81 billion kronor ($359 million), above analysts' average forecast of 2.43 billion kronor as compiled by Dow Jones Newswires.
"Handelsbankens' core business is going incredibly well. All the hard earnings, such as net interest income, have evolved really well," chief analyst at Cheuvreux Rodney Alfven told Swedish Radio.
He said the same would likely be true for Sweden's other big banks SEB and Nordea when they release their earnings reports on Thursday.
“In general I think we're going to see pretty good reports primarily because net interest income is doing so well," Alfven said.
"The core business in Swedish banks is very healthy. This is a crisis that has been entirely imported from abroad. If you look at how the Swedish core business is developing in terms of earnings, costs and credit quality, these are strong numbers we're seeing," he said.
Handelsbanken's total income grew by 11 percent to 7.12 billion kronor, while net loan losses were more than halved from the second quarter, from 571 million to 231 million kronor.
Net interest income rose by eight percent from a year earlier to 4.85 billion kronor, while operating profit grew by nine percent to 3.75 billion.
Total expenses climbed by eight percent year-on-year but shrank by two percent from the previous quarter to land at 3.13 billion kronor.
The result was "extremely good" and shows that Handelsbanken has taken market share from its rivals in both Swedish and international markets, Keefe, Bruyette and Woods bank analyst Henrik Schmidt told Dow Jones.
The bank said its liquidity situation remained strong.
"Within 48 hours, the bank can free up additional liquid funds of more than 250 billion kronor," it said in a statement.
The average volume of loans to the public increased by four percent and household deposits in Sweden rose by the same level.
Handelsbanken provided no outlook for the fourth quarter.
Alfven said that while he expected healthy reports from Sweden's other banks he did not expect them "to have numbers as strong as Handelsbanken, but in general it's going to look good."
Shares in the bank were up by 1.52 percent to 134 kronor in midmorning trading on the Stockholm stock exchange, as the main index was down by 1.58 percent.