* Q3 net profit 479 mln shekels, vs 155 mln year ago
* Credit loss charges 292 mln shekels, vs 378 mln
* Makes 150 mln shekel provision for early retirement plan (Adds detail, analyst comments, shares)
By Steven Scheer
TEL AVIV, Nov 29 (Reuters) - Bank Leumi, Israel's second biggest bank, has posted a higher quarterly profit helped by a fall in lower credit loss provisions, lower taxes and higher non-interest income.
"All in all it was a good quarter but when you compare it to other banks, (Leumi) has more moving parts that affect its bottom line and return on equity," UBS analyst Roni Biron said on Thursday.
Leumi is more exposed to volatile non-banking investments than peers, especially larger rival Hapoalim,
As such, analysts say it will have to focus on cost-cutting measures and boosting net interest margins - a difficult task in a low interest rate environment - since an expected slowdown in economic growth to around 3 percent in 2013 from a projected 3.5 percent this year will dampen credit demand.
Leumi said third-quarter net profit rose to 479 million shekels ($125 million), compared with a forecast for 529 million in a Reuters poll and after a profit of 155 million a year ago.
Net interest income rose to 1.87 billion shekels from 1.84 billion a year earlier while credit loss charges fell to 292 million shekels from 378 million. Non-interest income jumped 79 percent to 1.21 billion shekels.
It was forecast to post net interest income of 1.94 billion shekels and credit loss charges of 313 million.
Leumi made a provision of 150 million shekels in the quarter for the early retirement of 250 employees as part of a streamlining programme announced in February.
Its shares were up 0.8 percent in afternoon trade, underperforming 2.1-2.8 percent gains at Israel's four other large banks.
Biron said the fourth quarter likely will not be as good as the third but investors have already set their sights on 2013, when the sector will have to deal with a weakening economy and central bank regulations requiring core Tier 1 capital ratio of 9 percent by the end of 2014.
Hapoalim earned 625 million shekels in the third quarter, up from 471 million a year earlier and above expectations for 607 million. Net financing income rose while credit losses fell. ($1 = 3.84 shekels) (Additional reporting by Tova Cohen; Editing by Dan Lalor)