* Net profit up 4.11 percent
* Cost-to-income ratio improves to 42.06 percent
* Warns of slower growth in 2009/10
PORT LOUIS, Sept 29 (Reuters) - Mauritius Commercial Bank (MCB) posted a 4.11 percent increase in full-year net profits on Tuesday but forecast slower growth this financial year because of fallout from the global economic downturn.
MCB, the Indian Ocean island's largest banking group by assets and its most traded equity, recorded net profit of 4.05 billion Mauritius rupees ($128.8 million) for the year ended June 30, from 3.89 billion the previous financial year.
"The group has achieved sustained growth in all its banking activities despite the severe world recession and the ensuing slowing down of the economic growth in Mauritius, while investment-linked activities have been affected by the downturn of the international markets," the bank said.
MCB said it paid out a final dividend of 5.25 rupees per share, up 15.38 percent on the previous year. Basic earnings per share climbed 7.25 percent to 16.71 rupees per share.
MCB's stock price closed Tuesday's trading down 0.71 percent at 139 rupees per share after two days of profit taking, analysts said. MCB's share price has rallied 69.5 percent since a Feb. 26 low of 82 rupees.
The palm-fringed island is gaining increasing prominence as a financial hub. Its banks have remained fundamentally sound throughout the global financial crisis, analysts say, because lending is capped at 70 percent of deposits.
SLOWER GROWTH
In July, the rating's agency Moody's provoked a livid response from the central bank when it said it was reviewing MCB and State Bank of Mauritius (SBM), and might lower their ratings.
Last week, SBM posted a 3.79 percent fall in net profits for the year but said volumes were up.
MCB posted an improved cost-to-income ratio of 42.06 percent against 43.01 percent during the previous period.
Total assets stood 150.48 billion rupees, up 13.17 percent on June 2008, while liabilities increased 13.37 percent to 130.34 billion rupees.
The bank said the consequences of the global financial and economic crisis would likely continue to pose major challenges for the Mauritian economy in the coming months.
"In the present circumstances, results for the financial year 2009/10 are expected to show a slower rate of growth," it said.
Last week, the central bank told Reuters the $9 billion economy would grow by more than 4 percent next year, with a robust recovery expected in crucial sectors during the second half of 2009 and continuing into 2010. (Writing by Richard Lough; editing by David Clarke and Rupert Winchester)