UPDATE 1-Bank of Cyprus makes 1.8 bln euro loss on Greece, provisions

* Bank hit by Greek fire-sale, provisions

* Lender forced big customers to recap bank (Adds detail)

NICOSIA, Nov 26 (Reuters) - Bank of Cyprus, the bank which seized client deposits to recapitalise in March, reported a 1.8 billion euro ($2.44 billion) net loss for the first half of the year, hit by the forced disposal of Greek operations and rising loan-loss provisions.

The bank was one of three Cypriot lenders required to sell its Greek operations in March in an attempt to ring-fence the euro zone from contagion from a messy international bailout for the island.

Bank of Cyprus made a loss of 134 million euros a year earlier, but it has been radically transformed from the bank of a year ago. Now it has consolidated some assets of now-defunct Laiki Bank, turned big depositors whose money was seized into shareholders, and been stripped of its Greek assets.

The bank reported a 1.36 billion euro loss on disposing its Greek operations and booked more than half a billion in provisions.

John Hourican, a former Royal Bank of Scotland executive appointed CEO of the Cypriot bank less than a month ago, said arresting asset quality deterioration was a priority.

“Although the group faces some unprecedented challenges, we are clear on what needs to be done. Our priority remains to restore investor and customer confidence in the bank,” he said.

Based on new Central Bank definitions for non-performing loans the bank had an NPL ratio of 36 percent in the first half of the year.

Bank of Cyprus seized 47.5 percent of clients’ deposits exceeding 100,000 euros to recapitalise itself when international lenders discussing a bailout for Cyprus refused to inject cash into the bank.

It is the first time in the history of the euro zone crisis that client deposits were tapped to boost regulatory capital. Based on central bank guidelines its core tier 1 capital should exceed 9 percent.

The bank presently has a core tier 1 ratio of 10.5 percent. ($1 = 0.7374 euros) (Reporting By Michele Kambas; editing by Tom Pfeiffer and Jane Merriman)