South Africa's Nedbank H1 profit up 16 pct as bad debts drop

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JOHANNESBURG, Aug 5 (Reuters) - Nedbank Group, the South African bank majority owned by insurer Old Mutual Plc (Other OTC: ODMTY - news) , reported a 16 percent jump in first-half profit on Tuesday, buoyed by a drop in bad debts and stronger earnings from lending.

Nedbank, the smallest of South Africa's "big four" lenders, has been on a drive to reduce bad debts and generate better quality loans, reflecting concern about high levels of personal debt and anaemic growth in Africa's most developed economy.

South African consumers have been battered by rising food and fuel costs, while waves of strikes in both the platinum and engineering industries have hit economic output and corporate confidence.

Nedbank said diluted headline earnings totalled 965 cents a share in the six months to the end of June, from 831 cents a year earlier.

Headline earnings, the main profit measure in South Africa, exclude some one-time items.

Bad debts dropped by 30 percent, while net interest income, the measure of earnings from lending, rose by 9 percent to 11.3 billion rand ($1.06 billion).

Shares (Frankfurt: DI6.F - news) of the bank have risen 13 percent this year, outperforming an 11 percent rise in South Africa's benchmark Top-40 index. ($1 = 10.6640 South African Rand) (Reporting by David Dolan; Editing by Stella Mapenzauswa and Louise Heavens)