November 6, 2014 / 4:32 PM / in 5 years

UPDATE 1-Turkish arm helps Greece's NBG post Q3 profit

* NBG posts Q3 profit of 30 mln euros

* Turkish arm Finansbank contributes 109 mln euros

* Pace of new bad loan formation slows (Adds background, details)

By George Georgiopoulos

ATHENS, Nov 6 (Reuters) - National Bank of Greece (NBG) reported a third-quarter profit on Thursday, helped by strong results at its Turkish business, lower funding costs and lower bad-debt provisions.

The country’s biggest bank by assets said it made net earnings of 30 million euros ($37 million) in the quarter. It did not provide figures for the comparable period a year ago.

Net earnings in the nine months to September rose to 1.18 billion euros from 262 million euros in the same period in 2013, boosted by a deferred tax benefit booked in the second quarter.

The group’s cash cow, Finansbank in Turkey, contributed 109 million euros to group earnings in the third quarter, growing its profit by 36 percent from a year ago.

NBG failed the European Central Bank’s (ECB) stress test last month based on its balance sheet at the end of 2013, but has no capital gap after taking into account funds raised earlier this year and its EU-approved restructuring plan.

The bank has said it does not need to raise more funds as the so-called “dynamic” scenario of the ECB’s health check showed it had a 2 billion euro capital surplus.

National and Greece’s other big banks are still troubled by large problem loan portfolios after a deep recession which pushed unemployment to nearly 27 percent, and continue to make provisions to cover impaired credit.

The economy is set for a modest recovery this year, with national output seen growing by 0.6 percent.

NBG, 57.2 percent owned by Greece’s HFSF bank rescue fund, said non-performing credit edged up to 23.4 percent of its loan book at end-September from 23.2 percent in the second quarter. Bad-loan provisions were down 14 percent year-on-year. (Editing by Deepa Babington and Mark Potter)

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