* Mizuho July-Sept net profit Y191.9 bln vs Y92.3 bln yr ago
* Raises annual f'cast to Y500 bln vs consensus Y420 bln
* Bond trading, lower credit costs buoy profits
* Shares end down 2.3 pct before results (Recasts and changes to quarterly figures)
By Taiga Uranaka
TOKYO, Nov 12 (Reuters) - Mizuho Financial Group, Japan's second-largest lender by assets, raised its full-year outlook on Friday, after bond trading gains and a sharp fall in bad-loan costs helped second-quarter profit to more than double.
Japan's major banks, which emerged from the global financial crisis relatively unscathed, are enjoying strong profit growth this year, but their core lending operations remain sluggish as businesses and households remain reluctant to spend.
Mizuho is the first to announce July-September results among the country's top three banks. Third-ranked Sumitomo Mitsui Financial Group reports later in the day, followed by Mitsubishi UFJ Financial Group on Monday.
Mizuho said its net profit totalled 191.9 billion yen ($2.3 billion) for the July-September quarter, up from 92.3 billion yen a year earlier, boosted by profits from trading in Japanese government bonds and a substantial fall in credit costs thanks to fewer bankruptcies.
Credit Suisse had forecast a net profit of 108.6 billion yen for Mizuho in the second quarter, while Citigroup Global Markets Japan had estimated an 80 billion yen net profit.
Reuters calculated Mizuho's quarterly figures and the brokerage forecasts by subtracting first-quarter results from six-months figures.
Mizuho raised its outlook to a net profit of 500 billion yen for the year to March, from 430 billion yen previously and above an average estimate of 420 billion yen in a poll of 14 analysts by Thomson Reuters I/B/E/S.
Mizuho, which has the lowest capital adequacy ratio among Japan's top three banks, raised about 1.3 trillion yen in two rounds of share offerings in the past year.
Before the announcement, shares of Mizuho ended down 2.3 percent, against a 1.4 percent fall in the benchmark Nikkei average. (Reporting by Taiga Uranaka; Editing by Lincoln Feast)