* H1 net profit 1.3 bln euros, down 18 percent vs H108
* Loan provisions rise to 1.1 bln euros vs 158 mln in H108
* Irish provisions at 20 pct of total, some branches closed
* Expects bad debt costs to remain above average (Recasts adding CEO, CFO comments, detail)
By Gilbert Kreijger
UTRECHT, Netherlands, Aug 26 (Reuters) - Unlisted Dutch bank Rabobank expects bad debt costs to remain high in 2009 and possibly thereafter, after a jump in loan provisions hit its half-year net profit, it said on Wednesday.
Rabobank's bad loan provisions increased to 55 basis points (bps) of its average loan portfolio in the first half of 2009 from 9 bps a year ago, and Chief Executive Piet Moerland said he expected a similar percentage for the full year as companies suffer from the recession.
"We will continue to add to our provisions and remain prudent. In 2010 I expect it to continue above the average of 20 to 25 basis points," Moerland told journalists after the bank reported an 18 percent drop in first-half net profit to 1.3 billion euros ($1.86 billion).
Banks' profits have been hurt by rising bad loan provisions but uncertainty remains about whether provisions are at a peak or not. UK's Lloyds Banking Group said earlier this month debt impairments had peaked.
Rabobank has taken provisions on a fifth of its Irish loan portfolio, which totals 5 billion euros, due to the slump in Irish property prices, and Rabobank has closed branches in Ireland because it did not see signs of a quick recovery.
Rising unemployment and falling corporate profits are expected to negatively impact global economic trends in the coming quarters, Moerland said in the bank's half-year report.
Rabobank, the second-largest Dutch bank in terms of balance sheet total after ING, had increased loan provisions for corporate debt, but hardly or not at all for individual loans, Rabobank Chief Financial Officer Bert Bruggink said.
The bank's half-year net profit fell to 1.3 billion euros from 1.6 billion euros in the same period last year as bad debt costs increased seven-fold to 1.1 billion euros, the bank said.
Cooperatively-owned Rabobank, which originally provided loans to farmers, has not needed state support like rivals ING and SNS Reaal, and has a triple A rating from credit rating agencies, the highest possible level. (Editing by Will Waterman and Rupert Winchester)