JOHANNESBURG (Reuters) - South African mass-market lender Capitec Bank reported a 50 percent surge in first-half earnings, lifted by strong demand for loans, and said it would open 55 new branches this year.

Capitec has carved out a profitable niche by targeting consumers traditionally neglected by South Africa's major banks. The lender offers higher-margin, unsecured loans usually over a short term.

Capitec's bigger rivals have started to follow suit, and analysts now worry that debt-to-income ratios - already at a staggering 75 percent in South Africa - could worsen further.

The bank said diluted headline earnings per share totalled 1,099 cents in the year to end-February, from 730 cents a year earlier.

Headline earnings, the main measure of profit in South Africa, exclude some one-time items.

Loan revenue grew by 49 percent to 5.7 billion rand.

Even after that surge in lending, Capitec said it saw further growth potential.

"There is a perception that a credit bubble is developing in the unsecured credit market as a result of continuing growth in the term and value of credit granted," it said in a statement.

"We believe that growth will continue and that there is not a significant threat to the market as long as affordability and client behaviour is considered when granting credit."

Capitec also said it would add 55 new branches in the current year.

Shares of the bank are up 13 percent so far this year, compared with a 5.3 percent rise in the broad All-share index.