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UPDATE 2-Japan bank MUFG's Q3 profit slides as overseas growth costs bite

* Q3 net profit 236.5 bln yen vs 296.4 bln in year-ago qtr

* Keeps full-year net profit guidance at 950 bln yen

* MUFG's profit drop comes after earnings rises at SMFG, Mizuho (Adds details of results)

TOKYO, Feb 2 (Reuters) - Japan's largest lender Mitsubishi UFJ Financial Group (MUFG) posted a 20 percent drop in quarterly profit due to a surge in costs related to its overseas growth push, diverging from its two closest rivals who saw their profits rise.

MUFG, Sumitomo Mitsui Financial Group and Mizuho Financial Group - Japan's top-three banks - are suffering diminishing profits in their domestic banking business, hurt by persistently low interest rates amid the Bank of Japan's massive monetary stimulus measures.

To offset that, the Japanese lenders have aggressively looked overseas for growth, with MUFG taking the lead. That expansion has raised costs at the lender.

MUFG posted a net profit of 236.5 billion yen ($2.16 billion) for the October-December period, its smallest profit in three quarters, according to a Reuters calculation. MUFG and other Japanese banks only disclosed nine-month cumulative figures.

The No.1 Japanese lender said on Friday its expense ratio for the nine months ended in December rose to 67.3 percent from 63.7 percent in the year earlier period. Its operating costs rose 6.5 percent during October-December from the year-ago period, a Reuters calculation shows.

The bank has taken steps to contain costs. MUFG CEO Nobuyuki Hirano has launched a drive to become more efficient at home and overseas, including setting up a back-office center in the Philippines and targeting headcount reduction of 6,000 by the year starting in April 2023.

Sumitomo Mitsui Financial Group and Mizuho Financial Group earlier this week reported quarterly profit rises after hefty gains in their stock portfolios.

MUFG already holds stakes in Vietnam's VietinBank, Thailand's Bank of Ayudhya and Security Bank Corp of the Philippines.

In December, MUFG said it had agreed with Temasek Holdings , Singapore's state investment arm, to buy 73.8 percent of Indonesia's fifth-largest bank in three stages, adding that eventually it wants to make it wholly owned.

For the full year through March, the Japanese bank kept its net profit forecast of 950 billion yen, up 2.5 percent from the previous year and below an average estimate of 1.01 trillion yen in a poll of 14 analysts by Thomson Reuters. ($1 = 109.7000 yen) (Reporting by Taiga Uranaka; Editing by Subhranshu Sahu and Muralikumar Anantharaman)