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UPDATE 2-French bank Credit Agricole gets capital boost as profit rises

* Shares slip after strong run

* Stock still up more than 20 pct in 2017

* Boost from Eurazeo stake sale (Adds details, analyst comments, shares)

PARIS, Aug 3 (Reuters) - Credit Agricole on Thursday reported a sharp rise in its core capital ratio to 12.4 percent after making use of higher profits and proceeds from sale of a stake in investment company Eurazeo to bolster its finances.

The French bank, majority-owned by a network of co-operative regional lenders, has over the past year simplified a complex shareholding structure to ease investor concerns about its ability to build capital buffers to maintain dividend payments.

"Our financial robustness has been further strengthened thanks to our profitability and cautious capital management," chief executive Philippe Brassac said in a statement.

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

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

The bank's 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, which are used to determine how much capital a bank must set aside to withstand shocks, down by 1.9 billion euros.

Analysts at Jefferies investment bank described Credit Agricole's results as a "good harvest despite challenging weather," and kept a 'buy' rating on the stock.

Credit Agricole's shares slipped 0.7 percent in early trading, as traders cited some disappointment over the fact that the results had been flattered by some one-off items - such as the Eurazeo stake sale.

They also said Credit Agricole's shares had performed strongly so far in 2017, with traders using the slight disappointment at the results to take profits.

"There was nothing particularly bad in the numbers, but the top-line figure was not brilliant and they weren't blow-out results," said Terry Torrison, managing director at Monaco-based brokerage McLaren Securities.

"You've also got to remember that the stock has had a great run, so there's a bit of profit-taking," he said.

Credit Agricole's shares are up 24 percent year to date, versus a 9 percent rise for the European banking sector.

Credit Agricole was the last major French bank to report second-quarter results.

Natixis reported an increase in profits, while BNP Paribas and SocGen posted lower second-quarter profits.

(Additional reporting by Sudip Kar-Gupta in Paris and Helen Reid in London. Editing by Jane Merriman)