UPDATE 2-Intesa SP hikes profit outlook, Q3 net tops f'cast

* Q3 net 674 mln euros, tops analysts' forecast

* Return to dividend on 2009 results

* Shares end up 1.55 pct, outpacing sector

(Adds CEO comments, share price, forecast)

By Ian Simpson

MILAN, Nov 10 (Reuters) - Italy's biggest retail bank Intesa Sanpaolo SpA (ISP.MI) on Tuesday raised its forecast for full-year net profit and said it planned to sell or list billions of euros in assets by spring to boost capital.

Intesa Sanpaolo posted third-quarter net profits of 674 million euros ($1.01 billion), unchanged from last year, helped by trading profits.

The results blew past an average estimate of 461.5 million euros by analysts in a Thomson Reuters I/B/E/S forecast.

Chief Executive Corrado Passera said the bank's net profit could be about 2.5 billion euros this year even before a capital gain of about 260 million euros from the sale of a stake in its Findomestic consumer lending unit.

"It seems reasonable to expect ... that the consolidated net income for the whole year, for 2009, could be higher than what we recorded in 2008," he said in a conference call with analysts. Net profit was 2.55 billion euros last year.

Net profit also will get a boost from improving loan loss provisions, cost-cutting and a 13.1 percent quarter-on-quarter rise in commissions.

ASSET SALES

Intesa Sanpaolo expects to complete the sale or listing of a first batch of non-strategic assets in a move aimed at boosting capital ratios by its springtime shareholder meeting, Corrado Passera said.

They include asset manager Banca Fideuram, which analysts have valued at between 2.5 billion and 3.5 billion euros. Italy's Exor SpA (EXOR.MI), the main shareholder for Fiat SpA (FIA.MI), has expressed interest in Fideuram.

"Hopefully, we will make some announcements before the end of the year," Corrado Passera said.

Intesa Sanpaolo has earmarked about 11 billion euros in assets to list or sell to boost its capital ratios, now at the low end among big European banks.

Core Tier 1 -- a standard of capital held against risky assets -- was 7.2 percent at the end of September, up from 6.3 percent at the end of 2008.

Corrado Passera said Intesa Sanpaolo would resume dividends starting with its 2009 results. The bank did not pay out a cash dividend on 2008 results in order to boost capital.

The results were underpinned by trading profits of 447 million euros, including a capital gain of 114 million euros from the disposal of stakes in Natixis SA (CNAT.PA) and Banca Generali SpA (BGN.MI).

The shares ended the session up 1.55 percent at 2.945 euros. The DJ Stoxx banks index .SX7P was 0.09 percent firmer.

Intesa Sanpaolo has an estimated price/earnings ratio of about 15 on 2009 results, below the European sector average. (Editing by Karen Foster) ($1=.6676 Euro)