Shinsei Q1 soars on lower credit costs, outlook kept

TOKYO, July 29 (Reuters) - Japan's Shinsei Bank (8303.T) on Thursday said its first-quarter net profit more than doubled, helped by a drop in bad-loan costs, and reiterated its forecast for its first annual profit in three years.

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 finance operations.

Shinsei, also 24 percent held by the government, said net profit came to 13.9 billion yen ($159 million) for the April-June quarter, up from 5.2 billion yen a year earlier.

For the financial year through March, the bank kept its forecast of 12.5 billion yen in net profit, from a loss of 140.2 billion a year earlier though below a mean estimate of 14.6 billion yen in a poll of four analysts by Thomson Reuters I/B/E/S.

Shares of Shinsei have lost 27 percent so far this year, underperforming an 8 percent decline in the benchmark Nikkei average .N225. (Reporting by Taiga Uranaka; Editing by Chris Gallagher)