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* Property finance and corporate property loans to be merged
* Q3 property losses rise to 99 mln euros
* Net profit down a third to 34 mln euros
* Shares down over 7 percent (Updates with details)
AMSTERDAM, Nov 6 (Reuters) - Dutch bank and insurer SNS Reaal issued a profit warning and said it was bundling its loss-making property activities with commercial banking operations for a possible spin-off as it battles to pay back state aid.
SNS Reaal is suffering from property finance losses, and is generating too little profit to pay back the Dutch state by the end of next year, forcing it to look at selling part of its operations, issuing shares, and other options.
The group received 750 million euros ($959 million) of state aid in 2008 during the height of the financial crisis, and still owes 564 million euros plus a 50 percent premium, equivalent to another 282 million euros.
"SNS Reaal is currently researching a broad range of measures in the field of strategic restructuring and the enhancement and simplification of the capital base," it said on Tuesday.
It expects to give an update on the plans later this year or early 2013.
The bank is reviewing its commercial real estate activities, which faced mounting losses of 99 million euros in the quarter due to poor results in the international property market. Among possibilities are the sale of part of the unit, which is being merged with the business property loans operations.
Loan impairments in the retail and commercial banking businesses and rising losses in property finance will cause a net loss in the fourth quarter of 2012, it said.
The Dutch financial services group said it will also take a restructuring charge in the last quarter of the year related to bad business loans.
SNS shares were down 7.3 percent at 1.075 euros by 0935 GMT.
Net profit in the third quarter fell a third to 34 million euros, due mainly to losses in property financing.
$1 = 0.7823 euro Reporting by Anthony Deutsch; Editing by Mark Potter