DUBAI  - National Commercial Bank, Saudi Arabia's biggest lender, posted a 24% rise in second-quarter profit on Wednesday, helped by higher fee and commission income, as well as lower expenses.

The bank reported a net profit of 2.69 billion riyals ($717.24 million) in the quarter ended June 30, compared to 2.17 billion riyals in the same quarter a year earlier.

EFG Hermes had projected a net profit of 2.63 billion riyals for the second quarter.

Saudi banks have benefited from higher interest rates and a pickup in loan demand to support housing and government-related projects.

NCB said loans and advances rose 3.8% in the first half of the year when compared to the same period one year earlier. Customer deposits also grew 3.1% in the same period.

The bank's total operating income increased by 8.5% mainly due to the increase in net special commission income, fees income from banking services, foreign exchange income, investment related income, and lower other operating expenses.

NCB and Riyad Bank 1010.SE have been in merger talks since late last year in a move that would further extend NCB's lead over its closest rivals by boosting its assets by almost a third.

($1 = 3.7505 riyals)

(Reporting by Saeed Azhar, Editing by Davide Barbuscia) ((Saeed.Azhar@thomsonreuters.com; +971 44536787; Reuters Messaging: saeed.azhar.reuters.com@reuters.net))