* H2 cash profit rises 2.3 pct, above forecasts
* Bad debt provisions double but below expectations
* Full-year dividend cut by 14 percent, as expected (Adds details, quote, background)
SYDNEY, Aug 12 (Reuters) - Commonwealth Bank of Australia
Ltd (CBA)
CBA, also Australia's biggest mortgage lender, reported on Wednesday a cash profit of A$2.402 billion ($1.99 billion) for the six months ended June 30, up from A$2.348 billion a year earlier and exceeding market forecasts of around A$2.289 billion.
For analysts' reaction, click on [nSYD471950]
A recent acquisition and lower-than-expected bad-debt charges helped the bank to beat most market expectations, but it refused to call an end to the recent surge in bad debts.
"It's too early to declare victory on that," Chief Financial Officer David Craig told reporters.
Second-half bad-debt charges roughly doubled to about
A$1.33 billion from a year earlier, but this was below many
analysts' forecasts. The result was boosted by this year's
acquisition of mid-tier Australian lender BankWest from Lloyds
Market analysts welcomed the profit result as an indicator of the relative strength of Australian banks, but Macquarie Equities' Lucinda Chan echoed CBA's caution about bad debts. "All this (economic) stimulus is probably temporary. There's probably still a risk of bad debts in Australia from personal debts. Maybe you'll see that ahead," she said.
Australian banks have largely escaped the rout suffered by their global peers, helped by the Australian government's A$52 billion stimulus package and guarantee on wholesale funding.
But rising unemployment and a slowdown in growth after 17 years of expansion have seen bad debts piling up at the lenders.
The bank cut its full-year dividend as expected by 14 percent, declaring a final dividend of A$1.15 per share.
CBA shares have gained 52 percent so far this year, outpacing a 34 percent rise in the six-stock banking sub-index <.AXBAK>.
Cash profit is the core profit and strips out one-off and non-cash accounting items and forms the basis for dividends. ($1=1.205 Australian Dollar) (Reporting by Denny Thomas; Editing by Mark Bendeich and Muralikumar Anantharaman)