* Q3 net 218 mln euros vs year-ago 414 mln
* Analysts had on average forecast 197 mln
* 9mo loan-loss provisions up 24pct to just over 4 bln eur
* CEO says 2013 dividend depends on external factors
* Shares down 3.7 pct (Adds detail on capital ratio, ECB loans, shares)
MILAN, Nov 13 (Reuters) - Net profit at Intesa Sanpaolo SpA , Italy's biggest retail bank, halved in the third quarter due to higher loan-loss charges and the bank warned it may not pay a dividend for this year.
Intesa - which like other Italian banks has been hard hit by the country's longest post-war recession - turned in a net profit of 218 million euros ($293 million), down from 414 million a year ago but above a Thomson Reuters I/B/E/S analyst consensus forecast of 197 million.
The profit drop was due to an increase in the amount the bank set aside to cover bad debts, as well as falling revenue.
Unlike domestic rival UniCredit SpA, which reported results earlier this week, loan-loss provisions rose in the first nine months of the year to just over 4 billion euros, up 24 percent on the year.
Intesa is more exposed to Italy, where it makes 80 percent of its revenue, than UniCredit.
Intesa said it expected the cost of credit to remain high in the fourth quarter. Net interest income, a measure of how much money a bank makes from its core retail business, declined 12.3 percent in the three months to September from a year ago.
"Unlike UniCredit, asset quality is not improving," said Mediobanca in a note.
Intesa's new CEO Carlo Messina, who was appointed in late September after his predecessor was ousted after a clash with the bank's foundation shareholders, said a dividend payout depended on "external and regulatory developments."
Banks across the euro zone are cleaning up their balance sheets and strengthening their capital base in the run-up to a health check by the European Central Bank (ECB) to be carried out over the next year.
Intesa said its pro-forma Basel III Common Equity capital, a key measure of financial strength, stood at 11.2 percent - one of the highest in Italy and well above the 8 percent minimum required by the ECB.
The bank also said it had repaid a further 3 billion euros of cheap three-year loans it took from the ECB, bringing reimbursements so far to 15 billion euros. It had borrowed a total of 36 billion.
The stock extended losses after the results and was down 3.7 percent to 1.71 euros by 1345 GMT in a broadly lower Italian banking sector. It hit a day's low of 1.699 euros, its lowest in about a month.
The bank noted that the formation of new non-performing loans was slightly up quarter-on quarter at 3.7 billion euros, compared with a decline for UniCredit. ($1 = 0.7442 euros) (Editing by Tom Pfeiffer and David Holmes)