RPTS-UPDATE 2-Riyad Bank Q2 profit buoys Saudi banks

(Refiles to fix typo in byline)

By Souhail Karam

RIYADH, July 6 (Reuters) - Riyad Bank 1010.SE posted a 6.8 percent rise in second-quarter profit mainly on higher lending, triggering positive reaction in other Saudi banking stocks after modest performances in the two previous quarters.

Saudi Arabia's fourth-biggest lender by market value topped most analysts' forecasts with profit of 906 million riyals, or 1.06 riyals per share, in the three months to June 30, compared with 848 million riyals, or an adjusted 1 riyal per share, in the year-earlier period.

The average forecast of four analysts polled by Reuters last month was for quarterly profit of 841.15 million riyals. [nL29653070]

"These earnings confirm the bank's continuing drive towards focusing and expanding core banking activities and developing assets," the bank said in a statement posted on the bourse website.

Net operating income rose 3 percent after loans grew 44 percent at the end of June against a 23 percent rise in deposits, it said.

Net lending income -- the largest component of operating income -- rose 23 percent while net banking services fees climbed 21 percent, Riyad Bank said.   Continued...