* Q4 net profit 477 mln euros vs 443 mln expected
* Solvency ratio rises to 14.3 pct vs 12.8 pct last year
* CEO says won't rush repayment of state aid (Adds details on solvency ratio, Ireland, share reaction)
By Robert-Jan Bartunek
BRUSSELS, Feb 12 (Reuters) - Belgian financial group KBC on Thursday posted a better-than-expected adjusted net profit for the final quarter of 2014 as interest income expanded and loans and deposits grew in its main markets.
Net profit, adjusted for one-offs, for the fourth quarter came in at 477 million euros ($540 million), unchanged from the third quarter and well above the 443 million expected in a Reuters poll of nine analysts.
The group's shares rose as much as 3 percent in early trading, reaching their highest level since the credit crunch sent banking shares tumbling in 2008 and KBC needed 7 billion euros of state aid to stay afloat.
The group said it would pay a dividend of 2 euros this year but repeated it would not pay a dividend for its 2015 results under a deal which means it will avoid a coupon payment for the 2 billion euros of state aid it still holds.
Since 2008, the group has divested a string of assets across Europe and unwound some 25 billion euros of collateralised debt obligations. It now focuses on its main markets of Belgium and the Czech Republic, as well as an international markets unit with operations in Bulgaria, Slovakia, Hungary and Ireland.
The solid result in the final quarter was also reflected in the group's solvency ratio, which increased to 14.3 percent from 12.8 percent the year before.
In spite of this, Chief Executive Johan Thijs said he would not take any rash decision about repaying the remaining state aid still sitting on the company's books.
"2015 is a year when we won't pay a coupon so the state aid is a zero capital cost," Thijs told a conference call. "Combined with the conservative stance and uncertainties, it means that we are not going to pay it back before year end."
Thijs also remained conservative about the group's provisions for loan losses in Ireland, where it still has some 14.5 billion euros of mortgages and loans to developers outstanding.
The group kept its guidance for Irish loan loss provisions to come in at 50 to 100 million euros in 2015 and 2016, remaining cautious about first signs of a recovery in the Irish housing market.
"The moment that it becomes a bit more solid and predictable we could look into our current situation but as long as that is not clear we will keep our current guidance," Thijs said.
$1 = 0.8825 euros Editing by Mark Potter