UPDATE 1-Bahrain's AUB Q3 profit falls 45 pct on provisions

* AUB Q3 profit falls 44.9 pct on loan provisions

* Loan provisions hiked to about 7 times Q3/2008 value

(Adds analyst comment, background)

MANAMA, Oct 25 (Reuters) - Ahli United Bank AUBB.BH (AUB), Bahrain's largest lender by market value, posted a 44.9 percent drop in third-quarter profit on higher loan provisions.

The bank said net profit came in at $43.5 million for the three months to Sept. 30. The lender booked $68.14 million in provisions during the third quarter, up from only $10.2 million in the year-earlier quarter.

AUB had increased provisions on its Saudi corporate loan portfolio to 75 percent from 65 percent during the second quarter, it said in a statement on Sunday.

Banks in the Gulf Arab region have posted lower profits during the third quarter as they booked bad loan provisions, in particular on their exposures to a debt pile accumulated by troubled Saudi groups Saad [SAADG.UL] and Ahmad Hamad Algosaibi & Bros (AHAB).

But, AUB's profit came in below his expectations, said Suleman Soorani, banking analyst at Bahrain-based SICO Investment Bank, said

"We were expecting a stronger slow-down in provisions from the second to the third quarter," he said.

He said the bank likely booked higher provisions also on its Bahraini and Kuwaiti loan portfolios. (Reporting by Frederik Richter; Editing by Mike Nesbit)