Israel's Mizrahi Bank Q4 profit dips, lags f'cast

* Q4 net 96 mln shekels vs forecast 147 mln

* Hit by higher bad debt provisions

* Mkt cheered by peer-beating results

* Stock down 1.3 pct, outperforming local bourse

JERUSALEM, March 30 (Reuters) - Mizrahi Tefahot Bank (MZTF.TA), Israel's fourth-largest lender, on Monday reported a fall in quarterly net profit due to higher bad debt provisions, hit by the rapidly weakening economy.

Mizrahi recorded fourth-quarter net profit of 96 million shekels ($23 million), or 0.43 shekel per share, compared with 147 million shekels, or 0.65 shekels a share, a year earlier.

Mizrahi had been expected to earn net profit of 127 million shekels, according to the average of three analysts polled by Reuters.

At 0904 GMT, shares in Mizrahi were down 1.3 pct at 19.34 shekels, outperforming a 2.1 pct decline in the wider blue-chip index.

Financing income before doubtful debts rose to 588 million shekels from 507 million a year earlier. The bank was expected to post financing income of 566 million shekels.

The bad debt provision jumped to 182 million shekels from 50 million.

Mizrahi's return on equity fell to 10.4 percent in 2008 from 12.9 percent in 2007. Its ratio of capital to risk components was steady at 11.3 percent.

The bank said that, so far in 2009, it had raised 725 million shekels to bring it significantly closer to achieving a capital adequacy target of 12 percent.

"2009 poses significant risk but also great opportunity," Eli Yones, the bank's president, said in a statement.

Of Israel's largest banks, Mizrahi is the only one so far to post a quarterly profit.

Last Thursday, Hapoalim (POLI.TA), Israel's largest bank in terms of assets, posted a wider-than-expected net loss of 363 million shekels. [ID:nLQ136853]