(Recasts to focus on cost savings, adds background) MADRID, July 30 (Reuters) - Caixabank on Friday revised up its annual cost savings arising from the acquisition of Bankia to 940 million euros ($1.12 billion) as part of the Spanish lender’s plans to improve profitability. The bank had initially estimated yearly synergies would be worth at least 770 million euros by 2023. European banks are struggling to cope with low interest rates, and the economic downturn sparked by the pandemic is forcing a focus on cost cuts, including through tie-ups. Caixabank said its board approved the distribution of a cash dividend of 50% of consolidated net profit against 2021 adjusted earnings to reflect the extraordinary impact arising from the merger with Bankia. The dividend would be paid in a single instalment in 2022, Caixabank said in a statement. The announcement comes after the European Central Bank said last week that it would lift restrictions on dividends and share buybacks beyond September. In the second quarter, Caixabank booked a loss of 605 million euros due to restructuring-related charges of more than 1.9 billion euros to lay off 6,450 employees in Spain in the biggest ever staff overhaul in Spanish banking. Analysts polled by Reuters had expected a net loss of 878 million euros. Caixabank had reported a net profit of 115 million euros on standalone basis in the year-ago period. $1 = 0.8419 euros Reporting by Jesús Aguado, Editing by Inti Landauro and Sherry Jacob-Phillips Our Standards: The Thomson Reuters Trust Principles.