* Eurobank posts 38.3 mln euro Q4 profit, down 55 pct q/q
* Full-year 2016 profit 230.1 mln euros vs 1.18 bln 2015 loss
* Non-performing loans at 34.7 pct of books (Adds CEO comment, details, background)
By George Georgiopoulos
ATHENS, March 29 (Reuters) - Greece's Eurobank was profitable for a fourth straight quarter in October-December but earnings shrank despite slightly lower provisions for bad debt.
The third-largest Greek lender by assets, in which the national bank rescue fund owns a 2.4 percent stake, reported net earnings of 38.3 million euros ($41 million), down 55 percent from 85 million in the third quarter.
For 2016 as a whole, Eurobank reported a net profit of 230.1 million euros after a loss of 1.18 billion in 2015.
Greek banks including Eurobank are struggling with problem loan portfolios after a deep, protracted recession pushed unemployment to record highs, making it hard for borrowers to service their debts.
Banks entered the 2008 crisis with bad loans, or non-performing exposures (NPEs), of 14.5 billion euros, about 5.5 percent of their loan books. NPEs rose to 106.9 billion, or 51 percent, last year.
Banks have agreed with regulators on ambitious bad debt reduction targets spanning a 3-year time horizon.
They aim to cut their NPEs to 66.7 billion euros by 2019 from 106.9 billion in September, to bring their ratio to 34 percent from 51 percent.
Greek lenders are also grappling with funding gaps after a deposit flight that led to capital controls in June 2015 and still depend on central bank funding to plug the hole.
"Our main goal for 2017 is to remain profitable despite the deterioration of the economic climate in Greece and uncertainty which affects economic activity," Eurobank CEO Fokion Karavias said in a statement.
"Above all, we are focused on the challenge of reducing our non-performing exposures stock to levels agreed with regulators," he said.
Eurobank reduced its credit-loss provisions by 2.4 percent to 186.4 million euros in the fourth quarter from 191 million in the third.
Non-performing credit, loans more than 90 days past their due date, eased slightly to 34.7 percent of its loan book from 34.8 percent at the end of September.
The bank's NPE ratio came down by 40 basis points quarter-on-quarter to 45.2 percent of its loan book with cash coverage improving to 50.7 percent.
Eurobank said funding from the Greek central bank's emergency liquidity facility (ELA) fell by 8.1 billion euros last year due to deposit inflows and interbank repo transactions.
ELA borrowing stood at 12.billion euros in late March. (Reporting by George Georgiopoulos; Editing by Ruth Pitchford)