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* Impairments down by 14 pct
* Declares special dividend of 708 cents
JOHANNESBURG, July 30 (Reuters) - Absa Group, theSouth African bank majority owned by Britain's Barclays Plc, posted an 8 percent rise in half-year earnings onTuesday after its bad loans shrunk.
Headline earnings per share rose to 649 cents in the sixmonths to end-June, from a restated 599.6 cents a year earlier.Headline EPS, which exclude certain one-time items, is the maingauge of profit in South Africa.
Absa, South Africa's third-largest bank by market value, hasremained wary of the higher-risk unsecured loans that haveboosted margins at its rivals.
With interest rates at the lowest in decades, other SouthAfrican banks have made an aggressive push into unsecuredlending - loans not backed by collateral - raising concerns baddebts could sour as household debt levels rise.
Net interest income, a measure of earnings from lending,totalled 12.5 billion rand ($1.3 billion), compared with 11.9billion rand last year. Bad debt costs fell 14 percent to 3.5billion rand.
It also declared a special dividend of 708 cents in additionto its interim dividend of 350 cents.
Absa is the first of the country's "Big Four" banks to postearnings. South Africa's No.4 bank Nedbank is scheduledto report on Aug. 6 and industry leader Standard Bank aweek later on Aug. 15.
From August Absa will take over its parent's Africanbusinesses following a 18.2 billion rand deal comprising theissue of 129.5 million shares to Barclays.
Shares of Absa have fallen 7.9 percent this year,underperforming a 6.5 percent drop in Johannesburg's index ofbanks.
