UPDATE 1-Kuwait Islamic lender KFH's Q2 net up 22 pct

*Q2 results exceed expectations

*Analyst says profits do not reflect operational results

(Adds chairman and analyst comment)

KUWAIT, July 21 (Reuters) - Kuwait Finance House (KFIN.KW) (KFH), the country's biggest Islamic lender, reported on Wednesday a 22 percent rise in second-quarter net profit, beating expectations.

The lender made a net profit of 39.9 million dinars ($138.4 million) in the second quarter, up from 32.7 million dinars in the year earlier period, KFH said in a statement on the bourse website.

Net income in the first half of the year was 70.8 million dinars, it said.

Analysts at EFG-Hermes had expected KFH to post a net profit of 32 million dinars in the second quarter, according to a Reuters survey. [ID:nLDE66703O]

Independent analyst Hajjaj BuKhadour said the improvement "does not reflect the operational results which show that loans and credit operations were down".

The lender's chairman, Bader al-Mukhaizeem, said in a statement that financing transactions reached 450 million dinars during the first half of this year. He did not provide an explanation for the second quarter profit increase. ($1=0.2882 dinar) (Reporting by Eman Goma and Diana Elias; Editing by Firouz Sedarat)