STOCKHOLM, July 17 (Reuters) - Swedish bank Handelsbanken reported net profit that beat market expectations on Wednesday on the back of robust interest income and credit quality but said its expenses had risen 14% year-on-year in the second quarter.

Net profit fell to 6.79 billion crowns ($641 million) from 7.10 billion a year ago, topping a mean forecast 6.22 billion, according to LSEG estimates.

Shares in Handelsbanken, the oldest company on the Swedish stock exchange, were hammered earlier this year after it reported a 12% year-on-year surge in expenses, a closely watched metric for the bank, weighing on earnings in the first quarter.

The rival of Swedbank, SEB and Nordea said its expenses rose to 6.42 billion in the second quarter from 5.63 billion a year earlier to come in above the 6.30 billion seen by analysts.

($1 = 10.5852 Swedish crowns) (Reporting by Niklas Pollard, editing by Anna Ringstrom)