MILAN May 14 (Reuters) - Banco Popolare, Italy's fourth biggest bank by branches, returned to profit in the first quarter of the year as it reported lower loan loss provisions after a massive clean-up of its balance sheet at the end of last year.
Banco Popolare posted a 92 million euros ($119.40 million)net profit, compared with a loss of 109 million euros a year ago. It said more than half of the profit over the period came from gains on its so-called fair value option, or issues related to debt re-evaluation.
Net writedowns on deteriorated loans stood at 229 million euros, compared with 211 million euros a year ago and 683.5 million euros in the fourth quarter of 2012 - when the bank sharply raised its loan loss charges following an industry-wide audit by the Bank of Italy.
The lender said its first quarter results did not include an expected gain of around 100 million euros from its stake in the Agos Ducato joint venture with Credit Agricole.
($1 = 0.7705 euros) (Reporting By Silvia Aloisi, editing by Stephen Jewkes)