Swedish banking group Swedbank reported better-than-expected first-quarter net profit on Tuesday, driven by lower loan losses, but said that trade conflicts had dampened economic recovery in the bank’s markets.

The Nordic country’s biggest mortgage lender said net profit fell to 8.20 billion Swedish crowns ($852.7 million) from a year-ago 8.43 billion crowns and against a mean forecast of 7.66 billion in an LSEG poll of analysts.

CEO Jens Henriksson said that lower interest rates and turbulent markets had impacted both net interest and commission income in the quarter.

“The world economy is being revised down and it also affects us. We see that growth in Sweden is lower,” he told a news conference.

The outlook for the fragile, export-driven Swedish economy has worsened in recent months, driven by fears that tariff wars could weigh on world economic activity.

The dimmed outlook has changed the view on the central bank and several analysts now see it cutting rates at least on more time this year from the current 2.25%.

However, Swedbank’s Henriksson said the bank has gone through the large and medium-sized companies in its loan portfolio and that the direct impact of the tariffs had been “quite small” so far.

Swedbank had no loan losses in the quarter and instead booked reversals of 141 million crowns due to previously expected loan losses that had not materialized. Analysts had expected loan losses of 309 million crowns in the quarter.