UPDATE 2-S.Africa's Standard Bank warns of slow credit as loans lift H1
* Diluted headline earnings up 11 pct
* Lending income up 20 pct
* Credit impairment rise 28 pct
* Shares down nearly 3 pct this year (Adds co-CEO, analyst quotes)
JOHANNESBURG, Aug 15 (Reuters) - A spike in bad debt charges cast a shadow over higher profit and lending at Standard Bank Group, Africa's largest bank, underscoring the pressures on consumers in Africa's largest economy.
One in every four South Africans is unemployed and the number of borrowers with impaired credit records -- three or more payments in arrears -- has risen to nearly 50 percent from 36 percent in 2006.
The bank, which is giving out more unsecured, high-margin loans And improving its pricing for secured lending, posted an 11 percent rise in first-half earnings even as bad debt charges grew 28 percent.
Rival Nedbank posted a 23 percent rise in first-half credit impairments earlier this month.
"You are seeing a number of companies giving signs that the consumer is under pressure," said Viv Govender, a senior analyst at Vunani Private Clients.
"That is something that people are concerned about the South African banking sector."
South African banks are battling sustained low interest rates, anaemic economic growth and a competitive lending market, and have been posting higher credit impairments for the first half as borrowers struggle under enormous debt.
This will likely stay the central bank's hand in raising rates this year, giving borrowers some breathing room to catch up with ballooning debt.
"We expect consumers will continue to deleverage somewhat over the rest of this year and next, improving their financial health as long as debt servicing costs do not rise notably," Annabel Bishop, group economist at Investec, told Reuters on Wednesday.
MUTED LOAN GROWTH
Johannesburg-based Standard Bank, which is about 20 percent owned by the Industrial and Commercial Bank of China , said net profit from lending jumped 20 percent to 18.8 billion rand ($1.9 billion).
Unsecured credit jumped 47 percent to 44 billion rand, but still remains a small segment of the 533 billion rand in Personal and Business Banking lending.
Sim Tshabalala, one of two chief executives picked earlier this year to jointly head the bank, said he saw muted loan growth since slowing down lending.
"We are worried about pressures on consumers' disposable income, we are also worried that consumers are deleveraging," he said.
The bank, which has 18 African operations, said non-interest revenue, or earnings from fees and commissions, increased by 7 percent to 17.73 billion rand.
Diluted headline earnings per share rose to 504.5 cents in the six months to end-June, from 453.6 cents a year earlier. Headline EPS, which excludes certain one-time items, is the main gauge of profit in South Africa.
It declared an interim dividend of 233 cents per share, up from 212 cents in the previous year.
The bank is in advanced talks to sell its London-based commodity and forex trading business for over $500 million, sources told Reuters last month.
Standard Bank has sold off businesses in Argentina, Russia and Turkey and is turning its attention to the rapidly growing economies north of its borders.
The bank's shares are down 1.6 percent at 1300 GMT, extending losses to 3.7 percent so far this year, in line with Johannesburg's banking index. ($1 = 9.9813 South African rand) (Additional reporting by Benon Oluka; Editing by David Dolan and David Cowell)
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