Australia's NAB H2 net up 8 pct despite bad debts

SYDNEY, Oct 28 (Reuters) - National Australia Bank Ltd (NAB.AX), the country's largest lender, reported a slightly higher second-half cash profit on Wednesday, in line with market forecasts, despite higher provisions for bad debts.

Cash profit for the six months ended Sept 30 rose to A$1.81 billion ($1.66 billion) from A$1.68 billion a year earlier.

The mean forecast of eight analysts surveyed by Reuters was for a cash profit of A$1.74 billion, with the forecasts ranging between A$1.53 billion and A$1.93 billion.

The bank will pay shareholders a final dividend of 73 cents.

NAB shares, which closed at A$30.70 on Tuesday, have risen 47 percent this year on optimism the bank may have seen the worst of the credit crunch and as pressure on net interest margins is expected to ease.

The benchmark S&P/ASX 200 stock index .AXJO has risen 28 percent over the same period. (Reporting by Morag MacKinnon; Editing by Muralikumar Anantharaman and Mark Bendeich)