* Pretax profit 342 million DKK, vs 35 million yr-ago
* Bank raises guidance for full-year 2009 core earnings
* Sees 2009 core earnings of 2.8 bln to 2.9 bln DKK
* Shares up 2.7 percent
(Adds details, quotes, updates share price) By John Acher
COPENHAGEN, Oct 26 (Reuters) - Denmark's Jyske Bank beat all forecasts with a tenfold leap in third-quarter profit, increasing the chances it won't draw the state aid it applied for.
The country's second-largest bank after Danske also raised its guidance for full-year 2009 core earnings.
Pretax profit rose to 342 million Danish crowns ($69 million) in the three months to end-September from 35 million a year earlier, while analysts in a Reuters survey had on average expected 192 million, and none had seen it breaking 300 million.
Jyske Bank shares jumped as much as 5.2 percent to a three-and-half-week high of 213.50 crowns before cooling to 208.50, still up 2.7 percent, at 1041 GMT. The rest of Europe's banks were mostly lower. "Business volume and earnings are developing favourably and exceed our expectations as stated on July 16, 2009," Jyske Bank said in a statement.
Jyske, which is mostly confined to its domestic market, has fared better than most Nordic banks, many of which have heavy exposure to the crisis-hit Baltic states, including Swedbank, which reported a third straight quarterly loss last week.
Jyske raised its guidance for full-year 2009 core earnings before loan impairments and provisions for guarantees to between 2.8 billion and 2.9 billion crowns from an earlier projection of about 2.7 billion.
The favourable development in earnings made up for an increase in loan impairment charges and provisions for guarantees in the third quarter and for slightly higher estimated loan impairment charges for the full year, Jyske said.
Loan impairment charges and provisions for guarantees rose to 503 million crowns in the third quarter from 174 million a year earlier and from 480 million in the second quarter of 2009.
Analysts' average forecast for loan loss provisions had been 372 million.
"The only little worry is that their loan losses were higher than the market expected," said Danske Bank chief trader Mads Zink. "Otherwise it is a solid report."
Chief Executive Anders Dam told Reuters the increase in loan losses stemmed mainly from losses on loans to businesses and to a lesser extent from loans to private customers.
He said the write-offs followed the development in the Danish economy.
Jyske has said its strong liquidity and solvency could help it avoid taking state hybrid capital loans or guarantees under a government aid package.
It has applied for funds under the government's Bank Package 2 but has yet to decide whether to take such aid.
"The group's solvency ratio improved over the past seven quarters as a result of asset-and-liability management, risk management and consolidation," Jyske Bank said.
"The board now has the freedom to decide because we have improved our solvency," Dam said. "The decision will be made during the fourth quarter." (Additional reporting by Ole Mikkelsen and Henriette Jacobsen; Editing by David Holmes/Will Waterman) ($1=4.960 Danish Crown)