* Q3 net profit 660 million zlotys vs forecast 642 million
* Eyes exit from Ukrainian operations
(Adds share reaction, quotes, details, analyst)
By Piotr Bujnicki
WARSAW, Nov 10 (Reuters) - Pekao, Poland's second largest bank, expects to increase its dividend from this year's profits by paying out between 70 and 80 percent of its earnings, Deputy Chief Executive Luigi Lovaglio said on Wednesday.
Following the global financial crisis Pekao, which is 59 percent owned by Italy's Unicredit, slashed its dividend to boost capital ratios and paid 2.9 zlotys per share, or about 30 percent of its 2.4 billion zloty earnings in 2009.
"We were paying 70-80 percent of profits in dividends before the crisis. last year we paid 30 percent, our capital base is sufficient, it is natural we want to return to pre-crisis levels in terms of dividend," Lovaglio said.
Pekao, which did not pay a dividend from its 2008 earnings, saw its net profit rise about 4.5 percent in the first nine months of 2010 to 1.9 billion zlotys.
The bank does not provide full-year forecasts.
Pekao's shares were down 1.7 percent at 193 zlotys by 1322 GMT on Wednesday, the fifth-biggest loser in the Warsaw market's WIG20 index, which was down 1.1 percent.
Pekao's third-quarter results came in roughly in line with the market expectations, with net profit edging up to 660 million zlotys thanks to a modest expansion of the European Union's largest post-communist economy.
Pekao has been one of the most conservative lenders in Poland, helping it weather the downturn better than many rivals. It did not have to resort to a capital hike to boost its capital base like PKO BP, BCP's unit Bank Millennium or Commerzbank's BRE did.
Lovaglio also said Pekao may exit the Ukrainian market and sell its subsidiary OJSC Unicredit Bank due to unsatisfactory financial results.
"We are considering the best way to exit the Ukrainian market, be it through a sale (of OJSC Unicredit) or through other means. Our strategy includes an exit from that investment," Lovaglio said. (Writing by Patryk Wasilewski; Editing by Louise Heavens)