UPDATE 2-BPI Q1 net falls 22 pct on weaker domestic ops

(Adds with CEO on Angolan operations in paragraph 5-6)

By Ruben Bicho

PORTO, Portugal April 22 (Reuters) - BPI (BBPI.LS: Quote, Profile, Research), Portugal's third-largest listed bank, posted a 22 percent drop in first quarter net profit on Tuesday, on weaker domestic operations and tougher competition.

BPI said net profit fell to 75.3 million euros ($119.3 million) compared with 96.8 million in the same period a year earlier. Six analysts polled by Reuters had forecast an average net profit of 77.4 million.

Net interest income rose 2.5 percent to 159.4 million euros but operating revenue fell 4.1 percent to 138.6 million.

BPI, whose shares are down 33 percent this year, is the first bank in Lisbon's PSI20 index to announce first-quarter results.

The bank expects to carry out a rights issue of 350 million euros to shore up its finances by the end of the first semester. It is also in talks with Angolan state-owned company Sonangol to sell part of its leading private bank BFA in Angola.

"BPI has been in talks with Sonangol to sell part of BFA but no deal has been reached. The transaction has not been made," said Chief Executive Officer Fernando Ulrich.

BPI's tier 1 capital ratio in the first quarter was 5.4 percent and its core tier 1 was 4.3 percent. Tier 1 is a measure of regulatory bank capital put aside against risk.