UPDATE 2-Shinsei keeps full-year outlook despite strong Q1

* Q1 profit up 2.7 times to Y13.8 bln on lower credit costs

* Keeps full-year forecast of Y12.5 bln, citing uncertainty

* CEO: have no immediate plans to raise capital (Recasts, adds details)

By Taiga Uranaka

TOKYO, July 29 (Reuters) - Japan's Shinsei Bank (8303.T) on Thursday reported first-quarter profit that topped its full-year forecast but kept its outlook unchanged, citing uncertainty about the economy and its consumer finance business.

The midsize bank, one-third owned by U.S. buyout firm J.C. Flowers, has lost a combined $3 billion over the past two years, hurt by bad bets on real estate and its struggling consumer financial operations.

Shigeki Toma, a former banker at Mizuho Financial Group (8411.T), took the helm in June to lead the struggling bank's turnaround efforts at a time when its far bigger rivals are also having a tough time delivering strong revenue growth.

"Given these encouraging first-quarter results, we have no immediate plans to raise capital," he said in a statement.

"However, we do recognise the changing regulatory and market environment, and will consider capital-raising as one of our key strategic options going forward," he said.

Shinsei, also 24 percent held by the government, said net profit jumped 2.7 times from a year earlier to 13.9 billion yen ($159 million) in the April-June quarter on a fall in credit costs, which nearly halved to 13.8 billion yen from a year ago.

While the bank's first-quarter profit handily topped its full-year forecast of 12.5 billion yen, Shinsei left intact its outlook, saying uncertainty remains over the macro-economic situation and the impact of tougher regulation of the consumer finance industry.

A poll of four analysts by Thomson Reuters I/B/E/S calls for a net profit of 14.6 billion yen in the financial year to March.

Consumer lenders, which offer unsecured loans to individuals and small business owners, have been grappling with new rules that have lowered the maximum interest rate they can charge and put a cap on how much a customer can borrow.

Shinsei has said it will raise up to 100 billion yen this financial year to bolster its capital after plans to merge with rival Aozora Bank (8304.T) fell through, and the market is eager to hear when it will carry out the fundraising. [ID:nTOE64D00H]

While the amount will be much smaller than the recent fundraising of larger rivals like Mizuho Financial Group (8411.T), it will still cause a massive dilution of the existing shares of Shinsei, whose market value is a little over 150 billion yen.

Shares of Shinsei have lost 27 percent so far this year, underperforming an 8 percent decline in the benchmark Nikkei average .N225.

Before the results announcement on Thursday, the stock ended flat, versus a 0.6 percent fall in the Nikkei. (Reporting by Taiga Uranaka; Editing by Chris Gallagher)