UPDATE 1-Israel's Bank Leumi Q1 profit up 50%, to buy back shares

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TEL AVIV, May 27 (Reuters) - Bank Leumi, one of Israel’s two largest lenders, reported a 50% jump in quarterly net profit after the sale of its credit card unit in February and said it would buy back shares worth up to 700 million shekels ($194 million).

Leumi said on Monday it earned 1.09 billion shekels in the first quarter, up from 730 million shekels a year earlier.

Net interest income in the quarter rose 5.7% to 2.12 billion shekels, boosted in part by an increase in interest rate spreads. Leumi recovered 18 million shekels from loans previously written off, versus a credit loss expense of 130 million shekels a year earlier.

Non-interest finance income surged to 665 million shekels from 51 million a year earlier, boosted by a pre-tax gain of 314 million shekels from the sale of Leumi Card.

Leumi, which held 80 percent of Leumi Card, and property developer Azrieli Group, which owned the other 20 percent, sold the business to U.S. private equity firm Warburg Pincus for 2.5 billion shekels.

The bank declared a quarterly dividend of 437 million shekels, representing 40 percent of net income and up from 275 million shekels in the fourth quarter.

It said its board approved an additional buyback of its own shares valued at up to 700 million shekels, similar to the amount it bought back in 2018.

$1 = 3.6028 shekels Reporting by Tova Cohen Editing by Ari Rabinovitch and Edmund Blair