News: UPDATE 1-Australia's CBA Q1 profit rises 10 pct as margins improve

(Adds net interest margin, net profit, other bank results)

Nov 8 (Reuters) - Commonwealth Bank of Australia (CBA) (CBA) said on Wednesday its first-quarter unaudited cash earnings grew 10.4 percent as a re-pricing of its mortgage book helped margins in its home lending division and impairment charges fell.

Cash earnings for Australia's biggest bank by market value came in at A$2.65 billion ($2.03 billion) for the three months ending Sept. 30, up from A$2.4 billion last year, the bank said in a limited trading update.

Bad debts fell to A$6.1 billion from A$6.8 billion a year ago.

Cash profit, a measure that excludes one-offs and non-cash accounting items, is closely watched by investors. On a statutory basis, net profit rose 16.7 percent to A$2.80 billion.

The bank said its net interest margin in the quarter improved, without providing a number.

It said the margin was helped by asset repricing but weighed down by a newly-introduced banking levy, higher funding costs and competition.

In March, CBA, like its three biggest rivals, said it would raise rates on interest-only and investment home loans, reacting to regulators' concerns that home prices in Sydney and Melbourne - Australia's two biggest cities - may be in a bubble.

Australia's three other big banks - ANZ (ANZ), National Australia Bank (NAB), and Westpac Banking Corp (WBC) - have reported a rise in full-year profit to September in the past two weeks. CBA's full-year reporting period is to the end of June.

CBA's common equity Tier-1 capital ratio at the end of September rose to 10.1 percent from 9.4 percent a year ago, below the Australian Prudential Regulation Authority’s (APRA) target of at least 10.5 percent.

Loan impairment expenses edged down to A$198 million from A$322 million last year. ($1 = 1.3079 Australian dollars)