* Australia's third-biggest lender posts A$1.65 bln cash earnings
* Slightly disappointing, higher expenses & debt charges-analyst
* Despite higher bad debts, asset quality broadly sound-analyst (Adds analyst comment, bad debts detail)
By Paulina Duran and Rushil Dutta
SYDNEY/BENGALURU, Aug 14 (Reuters) - National Australia Bank NAB.AX , the country's No.3 lender by market value, on Wednesday reported flat growth in third-quarter cash profit and flagged more expenses related to customer remediation in the second half of fiscal 2019.
Australia's biggest banks have already paid over A$8 billion ($5.4 billion) in regulatory and remediation costs to wronged customers after an inquiry last year found widespread misconduct in the nation's financial sector.
As of April, NAB had put aside close to A$1.1 billion to pay aggrieved customers, including those charged fees for no service. The bank, which said it expected additional provisions in the second half, did not provide an exact figure in its limited trading update on Wednesday.
Azib Khan, banking analyst at stockbroker Morgans Financial, said his estimate was for an additional after-tax charge of A$500 million.
The flat A$1.65 billion in cash earnings reported for the three months ended June 30, had been lower than expected, he added.
"The main reasons for this (looks) to be slightly higher expenses and a slightly higher credit impairment charge," he said.
In a limited trading update, NAB said bad debt charges had jumped 21% to A$247 million compared to the same period last year, while impaired assets had also increased to be 0.85% of total loans, up from 0.71 percent a year earlier.
Revenue grew marginally and net interest margin increased compared with the first-half's quarterly average due to lower funding costs.
Khan said that despite the increase in bad debts, NAB's asset quality remained "broadly sound in overall terms".
NAB's common equity tier-1 ratio rose to 10.4% as of June 30 from 10% on March 31. ($1 = 1.4712 Australian dollars)