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UPDATE 1-French bank Credit Agricole gets capital boost as profit climbs

(Updates with details)

PARIS, Aug 3 (Reuters) - Credit Agricole reported a sharp rise in its core capital ratio to 12.4 percent as the bank took advantage of higher profits and a sale of a stake in investment company Eurazeo to beef up its financial position.

Improving economic activity in core European markets including France and Italy, coupled with a slight increase in interest rates and cost cuts, helped drive its second-quarter net income up 17 percent to 1.35 billion euros ($1.60 billion).

Revenue fell 0.6 percent, as its asset manager Amundi and insurance business suffered quarterly outflows.

Credit Agricole has over the past year simplified a complex shareholding structure with its parent mutual banks in order to ease investor concerns about its ability to build capital buffers to maintain its dividend payouts.

Its common equity tier one ratio, a key measure of financial strength, rose by 50 basis points by end-June compared to the end of March.

In June the bank sold a stake in Eurazeo for 790 million euros, a move that also helped free up capital, bringing its risk-weighted assets - used to determine how much capital a bank must set aside to withstand shocks -- down by 1.9 billion euros. "Our financial robustness has been further strengthened thanks to our profitability and cautious capital management," Philippe Brassac, the bank's chief executive said in a statement.

(Reporting by Maya Nikolaeva; Editing by Sudip Kar-Gupta and Andrew Callus)