* Q3 cash profit A$1.6 bln, revenues stable
* Q3 bad debt charges up 21 pct to A$228 mln
* NIM falls due to higher funding costs
* CET-1 ratio at 9.5 pct at June-end (Adds more earnings metric, background)
SYDNEY, Aug 15 (Reuters) - National Australia Bank NAB.AX , the country's top lender, on Monday posted a small drop in third-quarter unaudited cash profits on higher charges for bad and doubtful debts led by a mining downturn.
Cash profits fell 3 percent to A$1.6 billion ($1.22 billion) during the three months to June 30. The charge for bad and doubtful debts rose 21 percent to A$228 million compared with the quarterly average of the first-half ended March, it said in a limited trading update.
Chief Executive Andrew Thorburn is under pressure to boost growth and shareholder returns at home where it has underperformed its three main rivals for years. Last month it announced a top management shake-up to reverse declining market share in Australia and New Zealand. said its revenue was broadly stable in April-June compared with the quarterly average of the first half. It did not disclose the figures but added that growth in lending was offset by lower net interest margins (NIM).
Group NIM was slightly lower due to higher funding costs, it said.
Its Common Equity Tier-1 ratio was 9.5 percent at the end of June compared with 9.7 percent in March.
Bank shares have underperformed the broader market on growing concerns about future earnings growth.
The broader operating environment for Australia's "Big Four" banks - NAB, ANZ ANZ.AX , Westpac WBC.AX and CBA CBA.AX - has become onerous as they prepare for a new era of slowing growth after years of record profits.
They are also facing the prospect of further capital increases, higher bad debt charges and calls from some politicians for a sweeping public inquiry following a series of scandals over improper financial advice, rate rigging and insurance claims. "Big Four" banks are among the top losers on the S&P/ASX 200 index, down 5-12 percent so far this year. The benchmark index is up 4.4 percent.
Last week, ANZ posted a small drop in its 9-month profits while CBA reported its slowest earnings growth since 2009. Westpac said its stressed loans inched higher during the third quarter. ($1 = 1.3062 Australian dollars)