UPDATE 1-Nedbank halts E.Europe unit, eyes Africa growth

* Winding down E.Europe-focused trade-related loan unit

* Expanding Africa structured trade, project finance unit

(Recasts with Nedbank confirmation)

JOHANNESBURG, June 30 (Reuters) - South Africa-based Nedbank (NEDJ.J) is winding down a small London-based trade-related finance unit focusing on Eastern Europe and will expand its African structured trade and project finance arm instead.

Nedbank said on Tuesday it had decided to close the business, which discounted bank paper against trade flows, as it sought to limit the fallout from the global credit crisis. It laid off two people in London and is running down its book.

Nedbank Capital's joint head of investment banking, Mark Weston, said the bank will focus instead on winning more trade-related and project finance deals in Africa, leveraging off a tie-up with pan-African banking group Ecobank ECOB.LG, which has a strong presence in West Africa.

South African banks kept lending to each other throughout the crisis, avoiding the worst of the liquidity crunch that battered peers in the United States and Europe, but they have been hit by rising bad debts and derivative losses.

Several of the South African banks are now playing up the potential for growth in the rest of Africa.

Nedbank rival FirstRand (FSRJ.J) last week said it wanted to exit markets hit hard by the financial crisis and expand instead in emerging markets such as sub-Saharan Africa.

Nedbank is majority-owned by insurance group Old Mutual (OMLJ.J)(OML.L). (Reporting by Rebecca Harrison; Editing by Dan Lalor and Simon Jessop)