Commercial Lender Mortgage Second

Australia's CBA H2 earnings may rise 15 percent

SYDNEY, Aug 4 (Reuters) - Commonwealth Bank of Australia Ltd. (CBA) , Australia's biggest mortgage lender, is expected to report a 15 percent rise in second-half earnings on Wednesday on stronger lending, but growth may slow in fiscal 2007.

Australian banks are benefiting from 15 years of economic growth and a 30-year low in unemployment that have fuelled demand for credit and kept a tight lid on bad debts, but borrowing costs have risen on the back of higher interest rates.

The country's central bank increased its key interest rate to 6 percent this week -- the highest level since early 2001 and the second rate rise this year -- and raised its inflation forecast on Friday, fuelling speculation of a third rise later this year.

Analysts said commercial banks' profit margins would improve as they passed on the full rate rise to their loan customers and kept transaction accounts largely unchanged, but a longer term risk of rising rates was slower growth and more troubled loans.