UPDATE 1-Russian bank VTB's third-quarter net profit rises 42%

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MOSCOW, Nov 7 (Reuters) - Russian bank VTB’s net profit rose 42% in the third quarter, the lender reported on Thursday, and said it was confident it would hit its full-year profit target.

VTB, Russia’s second-largest bank, reported a net profit of 51.2 billion roubles ($804.3 million) in July-September compared with a revised profit of 36 billion roubles for the third quarter of 2018.

The state-controlled lender said net income in the third quarter helped counter a 21% fall in profit in the first six months of the year.

“A continuation of this trend in the fourth quarter will enable the bank to achieve its net profit guidance and to deliver a year-on-year profit increase for 2019,” VTB said.

The bank aims to make 200 billion roubles in 2019 net profit.

VTB shares were up 0.8% at 0930 GMT, slightly outperforming the benchmark MOEX index which had gained 0.4%.

The bank, second only to state-controlled Sberbank in the Russian market in terms of assets and capital, said its net interest income was flat in the third quarter at 110.2 billion roubles.

Provisions against bad loans declined to 32.4 billion roubles in the third quarter from 38.2 billion roubles in the same period a year earlier.

Its non-performing loans’ ratio declined to 5.5% of gross customer loans as of Sept. 30, from 5.7% as of June 30.

“The decrease in the cost of risk and the decline in provision charges was driven by stable credit quality across all business segments,” VTB said.

$1 = 63.6543 roubles Reporting by Andrey Ostroukh and Tatiana Voronova; Editing by Pravin Char