* NBG posts 87 mln euros profit in first quarter
* Bad loan charges in Greece fall sharply to 134 mln euros
* Non-performing credit edges up to 33.6 pct of loan book (Adds CEO comment, details)
By George Georgiopoulos
ATHENS, May 26 (Reuters) - National Bank (NBG) was profitable in the first quarter, helped by a sharp drop in bad debt provisions, Greece’s second-largest lender by assets said on Thursday.
NBG, which is 40 percent owned by the country’s bank rescue fund HFSF after its recapitalisation late last year, reported net profit of 87 million euros ($97 million), excluding assets held for sale and discontinued operations, after a loss of 1.91 billion euros in last year’s fourth quarter.
Greek banks still carry large problem loan portfolios after a deep, protracted recession pushed unemployment to record highs, making it hard for borrowers to service their debts.
More than 40 percent of the sector’s loans are non-performing, making the reduction of the bad loan stock the biggest swing factor for Greek lenders as they continue to make provisions for impaired credit.
NBG said provisions for impaired credit in Greece fell to 134 million euros in January-to-March from 671 million euros in the fourth quarter.
“First quarter results signal our return to profitability, showing that the bank is on track to attain its targets for the year,” Chief Executive Leonidas Fragiadakis said in a statement.
At the group level, non-performing credit, or loans in arrears for more than 90 days, edged up to 33.6 percent of NBG’s loan book from 33.1 percent at the end of December.
NBG clinched a deal in late December to sell its 99.8 percent stake in Turkish unit Finansbank to Qatar National Bank for 2.75 billion euros as part of moves to plug a capital shortfall identified by European Central Bank (ECB) stress tests in October.
It said borrowing from the ECB and the Bank of Greece fell to 20.8 billion euros from 24 billion at the end of the fourth quarter - the lowest exposure among Greek lenders.
Funding from the Greek central bank’s emergency liquidity window dropped 3 percent to 11.2 billion euros or about 16 percent of the bank’s assets, excluding European Financial Stability Facility (EFSF) bonds. (Reporting by George Georgiopoulos; Editing by Mark Potter)