* Q3 results due on Tuesday, Oct. 27, after market close
* Net profit seen up 30 percent to 92 million euros
By Sergio Goncalves
LISBON, Oct 26 (Reuters) - Portugal's second-largest listed bank Banco Espirito Santo (BES) is expected to report a 30 percent rise in third-quarter net profit on stronger margins and trading results despite higher bad loan provisions.
Seven analysts surveyed by Reuters forecast, on average, a net profit of 92 million euros ($138.3 million), up from 70.7 million euros a year ago.
"We see this quarter as part of a transition from a difficult environment during 2008 and 2009 to what is now expected to be a sustained recovery in 2010," said Andre Rodrigues, an analyst with Caixa Banco de Investimento.
Net interest income -- the difference between interest charged on loans and interest paid on deposits -- should rise 17 percent to 317 million euros, helped by BES' overseas operations in the growing economies of Angola and Brazil.
Analysts, who see BES as one of the most efficient banks in Portugal and Spain in terms of cost-to-income ratio, also expected trading results to swing to a positive 50 million euros after a year-ago loss of 13 million euros thanks to financial market gains.
But bad loans should continue to climb, to 1.5 percent of the total loan portfolio in September from 1.4 percent in June and 1.05 percent in September 2008.
Portuguese banks have had little or no exposure to "toxic" assets or real estate bubbles, but have suffered as a result of the worst recession in the country since the 1975 revolution, and the credit crunch which affected loan volumes and quality.
According to ThomsonOne Analytics, BES' shares trade at around 13 times to estimated 2010 earnings, at a discount compared to local rivals Millennium BCP and Banco BPI, trading at 16 times and 15 times respectively.
Since the start of the year, the stock has gained 23 percent, underperforming the DJ Stoxx Europe banking sector index, up 57 percent.
Following is a summary of analyst estimates (figures in millions of euros).
Net profit Net interest income
Q3 9-months Q3 9-months -------------------------------------------------------------- Average 92 317 341 987 --------------------------------------------------------------- UBS 129.1 350.5 396.9 1,001 Caixa BI 101.9 311 348.1 1,023 Keefe, Bruyette & Woods 101 315 347 965 BPI 100 311 346.2 n/a Banif 96.8 309.7 343 959.9 J.P. Morgan 74 n/a 320.2 n/a Millennium IB 39.5 305 285.7 n/a ($1=.6650 Euro) (Writing by Andrei Khalip; Editing by Jon Loades-Carter)