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* Q2 loss C$0.03/shr vs EPS C$0.05 yr-ago
* Net interest income falls 64 pct to C$3.9 mln
* Says will not pay dividend on common shares
Aug 7 (Reuters) - Mortgage financier Quest Capital Corp QC.TO swung to a second-quarter loss, as net interest income fell and it set aside money for bad loans, and suspended its dividend on common shares.
The lender posted a net loss of C$4.3 million, or 3 Canadian cents per share, compared with net income of C$7.5 million, or 5 Canadian cents a share, a year earlier.
"Many of our borrowers remain challenged in finding take-out financing and as a result, risk of loan impairments remains above average," Chief Executive Brian Bayley said in a statement.
Provision for loan losses was C$5.9 million in the second quarter compared with no such provision last year.
Net interest income fell 64 percent to C$3.9 million.
Quest said it would not be paying a dividend on its common shares until it has utilized all of its tax loss carry forwards.
"Quest cannot reasonably determine the precise timing, in the short term, of the utilization of its tax loss carry forwards," the company said in a statement.
Stocks of the Vancouver-based company closed at C$1.06 Thursday on the Toronto Stock Exchange. (Reporting by Amit Kumar in Bangalore; Editing by Ratul Ray Chaudhuri)