(Adds CEO comment, other figures, background) SYDNEY, Aug 11...

(Adds CEO comment, other figures, background)

SYDNEY, Aug 11 (Reuters) - National Australia Bank (NAB) on Friday said its third-quarter cash profit rose 5 percent, helped by credit growth as well as a fall in bad debt expenses.

NAB's unaudited cash profit was A$1.7 billion ($1.34 billion) in the three months to June 30, according to a trading update, compared with A$1.6 billion a year ago. Bad and doubtful debt charges fell 12 percent to A$173 million.

The company said its revenue for the quarter inched up 2 percent. Net interest margins rose, aided by lower funding costs.

Its Common Equity Tier-1 ratio was 9.7 percent at the end of June, compared with 10.1 percent in March.

NAB said it was well placed to respond to new capital benchmarks, following a requirement by the Australian Prudential Regulation Authority for the "Big Four" banks to have Tier 1 capital ratios of 10.5 percent by 2020.

The Big Four - Commonwealth Bank (CBA), Westpac Banking Corp (WBC), ANZ Banking Group (ANZ) and NAB - hold combined market share of more than 80 percent and authorities are concerned that any failure could fatally weaken the broader economy.

Earlier this week, larger rival CBA reported a 4.6 percent rise in its full-year net profit. ($1 = 1.2718 Australian dollars)