UPDATE 2-Japan's Mizuho posts 19.9% drop in H1 profit on retail weakness, high comparison base

* H1 net profit Y287.7 bln vs Y359.4 bln year prior

* Keeps full-year forecast at Y470 bln

* H1 profit pushed up last year by release of bad loan provisions (Adds further earnings figures)

TOKYO, Nov 14 (Reuters) - Mizuho Financial Group Inc said on Thursday its half-year net profit fell 19.9%, primarily due to weakness in its retail operations as well as a one-time high comparison base last year.

Japan’s third-largest lender by assets reported April-September profit of 287.7 billion yen ($2.6 billion), compared with 359.4 billion yen in the same period a year earlier.

Net profit last year was temporarily pushed up by the release of bad loan provisions as clients including Sharp Corp improved their performance.

For the full year through March, Mizuho kept its profit forecast at 470 billion yen, slightly below the 475.6 billion yen average of 13 analyst estimates compiled by Refinitiv.

Mizuho also said its retail business division posted a net loss of 4.1 billion yen, versus 13.5 billion yen of net profit a year prior.

Credit-related costs rose by 41 billion yen for the six months from a year earlier, dragging down its net profit.

The bank’s domestic lending business also remained tepid, with a loan-to-deposit rate margin - or difference between interest earned on loans and paid on deposits - falling to 0.78% from 0.82% a year earlier.

Japanese banks have struggled in the lending business under a prolonged low interest rate environment. Furthermore, there has been a speculation of the central bank deepening negative policy interest rates, putting more pressure on banking profit.

As the domestic market is widely expected to shrink, Mizuho’s bigger competitors such as Mitsubishi UFJ Financial Group Inc and Sumitomo Mitsui Financial Group Inc have aggressively tapped into Asia by investing in local commercial banks.

Mizuho, on the other hand, is considering tie-ups with non-financial firms, the head of its banking unit said in an interview with Reuters last month. ($1 = 109.1000 yen)

Reporting by Takashi Umekawa; Editing Kim Coghill and Christopher Cushing