* Q4 net profit 1.03 bln riyals vs 810 mln yr-ago - statement
* 2013 net profit 3.95 bln riyals vs 3.47 bln in 2012
* Higher income, lower expenses cited for profit hikes (Adds details/background)
RIYADH, Jan 8 (Reuters) - Riyad Bank, Saudi Arabia's third-largest lender by assets, posted a 27.2 percent jump in its fourth-quarter net profit on Wednesday, beating forecasts as income rose and expenses declined.
The bank said in a bourse filing it made 1.03 billion riyals ($274.6 million) in the three months ending Dec. 31, compared with 810 million riyals in the same period of 2012.
Analysts surveyed by Reuters expected the bank to post an average net profit of 954.3 million riyals for the fourth quarter.
Riyad Bank said the year-on-year improvement was due to an increase in operating income - which climbed 7.5 percent to 1.795 billion riyals - and a drop in expenses, without elaborating further.
Saudi companies issue brief earnings statements early in the reporting period before publishing more detailed results later.
Net profit for the full year was 3.95 billion riyals, up 13.9 percent from 3.47 billion riyals in 2012. It cited the same factors of higher operating income - up 4.2 percent in 2013 versus the previous year - and falling expenses for the rise in earnings.
Saudi banks have benefited from rising lending, deposits and deal activity in an economy buoyed by years of high state spending which is backed by strong oil prices and record government surpluses.
Many banks have been raising capital in recent months to strengthen their reserves after a period of sustained lending growth, with Riyad Bank completing a 4 billion riyal capital-boosting Islamic bond issue in November.
Loans and advances at the end of 2013 stood at 131.2 billion riyals, up 11.7 percent on the same point of 2012.
Customer deposits gained 4.8 percent from a year earlier and stood at 153.2 billion riyals on December 31.
The bank said Jan. 7 its board had recommended a cash dividend of 0.8 riyals for the second half of 2013. This was higher than the 0.65 riyals it paid for the same period of 2012.
($1 = 3.7505 Saudi riyals) (Reporting by Angus McDowall; Editing by David French)