* Swedbank q3 profit lags forecast
* Global market turmoil, China, hits trading income
* Net interest income slightly above forecast (Adds details, background, CFO quote)
STOCKHOLM, Oct 20 (Reuters) - Swedish bank Swedbank reported a bigger-than-expected fall in third quarter net earnings on Tuesday as the global market turmoil hit trading income.
Swedbank, one of Sweden's biggest mortgage lenders, said operating profit in the quarter fell to 4.96 billion Swedish crowns ($597 million) from 5.73 billion a year ago, below an average forecast of 5.28 billion in a Reuters poll of analysts.
Swedbank said fears over growth in China, which saw its GDP growth fall under 7 percent for the first time since 2009, and ongoing problems in Europe had affected markets negatively, echoing the message from Morgan Stanley on Monday.
As a consequence the net fair value result, which includes trading in the bank's own assets, fell sharply to 4 million crowns from 799 million a year earlier, well below the average forecast of 331 million.
"There is increased concern with the international growth situation and the debt situation in Europe remains," said Chief Financial Officer Goran Bronner.
Despite ultra-low interest rates imposed by Sweden's central bank Swedbank reported roughly unchanged revenues mortgages.
Net interest income was down marginally to 5.81 billion crowns from 5.83 billion a year earlier, above the average forecast of 5.71 billion.
For full report click on ($1 = 8.3065 Swedish crowns) (Reporting by Johan Ahlander, editing by Niklas Pollard)