* CEO says greater chance of higher dividends, buybacks
* Bank to cut about 250 jobs in corporate bank
* Q2 net profit down 28 pct, tops analysts' expectations
* Shares register biggest gain in eight months (Adds CEO quotes, shares, more details)
AMSTERDAM, Aug 8 (Reuters) - Shares in ABN Amro registered their biggest gain in eight months on Wednesday as the Dutch bank hinted at more rewards for shareholders and announced plans to shrink its international corporate banking activities.
ABN Amro said its capital buffers had grown towards the top end of the range deemed necessary for extra shareholder rewards, as second-quarter net profit of 688 million euros ($800 million) comfortably beat analysts' forecasts, despite a 28 percent drop.
"We feel more confident now than we did three months ago," Chief Executive Kees van Dijkhuizen said, when asked at a news conference about possible higher dividends or share buybacks.
"We will pay out 50 percent of our sustainable profit as promised, and we'll decide on possible extra shareholder rewards at the end of the year."
ABN Amro had said it would maintain relatively large capital buffers as new banking regulations, dubbed Basel IV, look set to significantly shrink them when they come into effect.
The bank's core capital adequacy ratio was 18.3 percent at the end of June, up from 17.5 percent three months earlier, near the upper end of the 17.5-18.5 percent range set for this year.
That improvement "will raise hopes again about higher capital returns" for investors, KBC Securities analyst Jason Kalamboussis said in a note.
ABN Amro shares were up 3.2 percent to 24.08 euros at 0930 GMT, topping the blue chip AEX index in Amsterdam.
The impact of Basel IV made ABN Amro, one of the three dominant banks in the Netherlands, decide to cut its international corporate banking activities, as stricter capital requirements limit their profitability.
ABN said it would focus its Corporate and Institutional Banking (CIB) division on higher-yielding activities, such as lending to Dutch corporations, clearing and private equity.
"CIB's financial performance has not been good enough and its growth requires a lot of capital," Van Dijkhuizen said.
To improve profitability, the amount of capital allocated to the division will be reduced, ABN said, mainly limiting trade and commodity finance operations in the offshore energy, diamond and shipping sectors.
The bank will cut up to almost 10 percent of the 2,600 jobs at the division, lowering its costs by 80 million euros.
ABN in December said it would assess the future of its corporate bank, as the new banking rules hurt profitability by requiring banks to hold more capital for assets with a relatively high risk.
The cut in corporate activities will reduce the risk-weighted assets on ABN's balance sheet by 5 billion euros by 2020, the bank said, to 34 billion euros.
ABN was nationalized during the 2008 financial crisis and returned to the stock market in 2015. The Dutch government still holds 56 percent of the bank's shares and hasn't sold any in almost a year.
Since its bailout, ABN has refocused on the Dutch market, cutting thousands of jobs in the process.
($1 = 0.8606 euros) (Reporting by Bart Meijer; Editing by Gopakumar Warrier and Mark Potter)