Saudi-based Al Rajhi Bank, the Gulf's largest lender by market value, said on Tuesday second-quarter profit rose 1.7 percent due to higher customer deposits and diversifying its banking financing and investment products.

Rajhi made a net profit of 1.771 billion riyals in ($472.3 million) in the three months ending June 30, 2009 against 1.74 billion riyals in the year-earlier period, it said in a statement on the Saudi bourse website.

Three analysts surveyed by Reuters had expected net profit of 1.85 billion riyals on average.

Saudi Arabia's biggest bank said it had raised provisions by 55 percent compared with last year, without saying whether this was referring to the second quarter or first half. It also gave no absolute figure.

Operating profit rose 6.8 percent to 2.9 billion riyals, while net investment and financing income -- the equivalent of net income from lending in traditional banking -- gained 9.3 percent to 2.339 billion riyals.

It also said it would pay a dividend of 1.25 riyals for the first half.

Assets rose 10 percent to 165 billion riyals in the first six months, the value of investments gained 14.9 percent to 748 million riyals, while the financing volume rose by 15.2 percent to 144 billion riyals. Deposits rose 13.9 percent to 123 billion riyals. It gave no quarterly date for these figures. - Reuters