UPDATE 1-Spain's Bankinter H1 net profit jumps 113 pct

MADRID, July 16 (Reuters) - Spanish bank Bankinter (BKT.MC) said on Monday first-half net profit rose 113 percent to 251 million euros ($346 million) thanks to extraordinary gains from the sale of half its insurance arm.

Analysts had expected Bankinter to post net profit of 277.7 million euros after Spain's sixth-largest bank by value sold part of its insurance unit to Mapfre (MAP.MC).

Bankinter said the net gain from the insurance sale had been boboked at 111.2 million euros. Without the sale, analysts had forecast net profit of 145 million. First-half results last year were boosted by the sale of shares in paper group ENCE.

Operating profit was up 23 percent to 249.4 million euros, compared to a forecast of 248.6 million.

Net interest income, the gap between interest a bank earns on loans and pays on deposits, rose 27 percent to 285.9 million euros as Bankinter fed European rate rises in to customer loans, close to analysts' forecasts of 288 million euros.

The rise was more than the 18.6 percent increase reported by Banesto (BTO.MC) last week because Bankinter has a higher exposure than most Spanish banks to residential mortgages which it can reprice more than corporate loans.

As a decade-long property boom starts to wane and higher interest rates push up the cost of mortgage repayments, analysts are concerned defaults could start to rise.

Bankinter said its bad and doubtful debt level reached 113.80 million euros, 0.28 percent of the amount at risk, a "level far lower than the rest of the sector".

The bank said provision for insolvency had increased 20.2 percent compared to 2006.

Bankinter said turnover from commissions grew 16.7 percent to 121.4 million euros compared to the previous year.

The bank said its total loans grew 19.5 percent year-on-year to 34.5 billion euros, slowing considerably from June last year when loans were up 26 percent.

Bankinter shares are trading at about 16.5 times forecast 2008 earnings according to Reuters data, much more costly than the average 10.2 times for the DJ Stoxx index of European banking stocks .SX7P thanks to recurrent takeover talk.

((Reporting by Joe Ortiz and Sarah Morris; editing by David Cowell; joe.ortiz@reuters.com; +34 91 585 8295))

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