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* NBG Q1 profit 5 mln euros, down from 73 mln in Q4
* Piraeus Q1 loss falls to 6 mln euros from 12 mln in Q4 (Adds NBG, Piraeus CEOs comment, background, details)
By George Georgiopoulos
ATHENS, May 24 (Reuters) - Uncertainty over Greece's bailout review took its toll on Piraeus Bank and National (NBG) in the first quarter as the country's two biggest lenders focused their efforts on cutting bad debts.
Greece's economy contracted in the first three months of the year but less than in the final quarter of 2016, flash estimates by its statistics service showed last week, as jitters over the conclusion of a bailout review hurt business confidence.
Athens finally reached a deal on reforms with its foreign creditors in early May after six months of negotiations that hurt economic activity and made life harder for Greek banks.
The banks are still struggling with problem loan portfolios after a deep, protracted recession pushed unemployment to record highs, making it hard for borrowers to service their debts.
Piraeus, which is 26.2 percent owned by Greece's bank rescue fund and is the country's largest bank by assets, on Wednesday reported a narrower net loss of 6 million euros ($6.7 million)thanks to lower provisions for impaired loans.
But although NBG, Greece's second largest lender, said it was profitable for a third straight quarter, net earnings fell sharply in the period as its bad debt provisions rose.
NBG, which is 40 percent owned by the HFSF bank rescue fund, posted net profit of 5 million euros ($5.6 million), excluding assets held for sale and discontinued operations, versus net earnings of 73 million euros in the fourth quarter.
Greek banks entered the 2008 global financial crisis with bad loans, or non-performing exposures (NPEs), of 14.5 billion euros, about 5.5 percent of their loan books.
Last year NPEs rose to 106.9 billion euros and banks have agreed with regulators on ambitious reduction targets, aiming to cut their NPEs to 66.7 billion euros by 2019 to bring their ratio to 34 percent of total loans, down from 51 percent at the end of 2016.
"Despite the pick up in uncertainty in the first few months of the year, NBG managed to reduce NPEs for yet another quarter, confirming that it is well on track to deliver on fiscal year 2017 targets," CEO Leonidas Fragiadakis said in a statement.
NBG's non-performing loans (NPLs), credit past due more than 90 days, edged up to 33 percent of its book in the first quarter from 32.9 percent at the end of December. Its NPE ratio, which includes NPLs, stood at 43.6 percent.
NBG's loan impairments rose 78 percent quarter-on-quarter to 236 million euros from 219 million in last year's final quarter, while its stock of NPEs fell by 200 million euros.
Piraeus, with a current market value of 2.02 billion euros, said bad debt provisions fell to 258 million euros, from 310 million in the fourth quarter while non-performing loans made up 37.8 percent of its book at the end of March, from 37.5 percent in the previous quarter. (Editing by Alexander Smith)