RABAT, March 30 (Reuters) - Moroccan lender BMCE Bank of Africa said on Thursday its 2016 net profit rose 4 percent to a record 2 billion dirhams ($204 million) thanks to rising margins and commission income.

Consolidated net income rose 10 percent to 12.99 billion dirhams last year, the bank said in a statement published by L'Economiste newspaper.

Income from interest and commissions made up 87 percent of the bank's income, BMCE said, while costs to cover risks rose 12 percent to 1.6 billion dirhams. It did not give details.

BMCE, like other big lenders in Morocco, has faced higher risks in sub-Saharan Africa where it has been expanding aggressively, as well as bad loans in its home market after years of economic turmoil following the financial crisis and Arab spring.

Total bad loans rose to 8.8 billion dirhams from 7.3 billion dirhams at the end of 2015, data from the bank showed.

BMCE's return on equity (ROE) was 12.6 percent in 2016, down from 13 percent in 2015. Total assets jumped 9.5 percent to 305.92 billion dirhams, the bank said.

Sub-Saharan subsidiaries Bank of Africa, La Congolaise de Banque and Banque de Developpement du Mali contributed 32 percent to BMCE's profit, the bank said.

Last month, Moody's changed BMCE's outlook to stable from negative.

Along with other Moroccan banks, BMCE is preparing to launch an Islamic subsidiary after the authorities gave the go-ahead to establish Islamic banks and issue sukuk, or Islamic bonds.

BMCE Bank has picked Bahrain-based Al Baraka Banking Group as its Islamic banking partner.

(Reporting by Samia Errazzouki, editing by David Evans and Susan Fenton) ((Aidan.Lewis@thomsonreuters.com ; +216-29850352;))