Feb 6 (Reuters) - Australia's biggest bank, Commonwealth Bank...

Feb 6 (Reuters) - Australia's biggest bank, Commonwealth Bank of Australia (CBA) , on Wednesday said its first-half unaudited cash profit rose 1.7 percent helped by a growth in home loans and retail banking services.

However, profit missed analysts' forecasts. The overall growth in lending and deposits was partially offset by lower margins hurt by higher funding costs that overshadowed the benefits of an out-of-cycle mortgage rate rise last year.

CBA had raised its variable mortgage rates by 15 basis points, while the bank steadily reduced the rates it paid depositors.

The bank’s net interest margin, the difference between interest costs and interest earned and a key gauge of profitability, fell 6 basis points to 2.1 percent during the period.

Net interest income was slightly lower at A$9.13 billion. Home lending "growth in the half was broadly in line with domestic system growth, following two halves of moderation as CBA took early action to manage regulatory requirements," the bank said in a statement.

Cash earnings from continuing operations rose to A$4.68 billion ($3.38 billion) for the six months ended Dec. 31, compared with A$4.60 billion a year ago, and lower than an A$4.78 billion estimate by nine analysts polled by Reuters.

CBA declared an interim dividend of A$2 per share, the same as last year. ($1 = 1.3827 Australian dollars)