* Alpha posts profit of 41.2 mln euros
* Loan-loss provisions fall 26.5 pct q/q
* Non-performing loans at 38.3 pct of book (Adds CEO comment, details)
By George Georgiopoulos
ATHENS, Nov 30 Alpha Bank, Greece's fourth-largest lender by assets, turned profitable in the third quarter after booking lower provisions for impaired loans.
Alpha, 11 percent owned by the national bank rescue fund HFSF after its recapitalisation late last year, on Wednesday reported net profit of 41.2 million euros ($44 million) after a loss of 16.8 million euros in the second quarter.
Greek banks are struggling with large 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 crisis in 2008 with non-performing exposures (NPEs) of 14.5 billion euros or 5.5 percent of their loan books and that rose to 106.9 billion or 50.5 percent at end June this year, excluding off balance sheet items.
Greece's banks are also grappling with funding gaps after a deposit flight last year that prompted capital controls in June 2015. They still depend on central bank funding.
"As far as NPEs are concerned, we made a significant step to articulate our ambition to reduce the stock in the medium term through operational targets agreed with (the ECB's) Single Supervisory Mechanism," CEO Dimitris Mantzounis said in a statement.
The Bank of Greece said on Wednesday that based on targets banks submitted in September, they aim to cut the NPE gross volume to 66.7 billion by 2019 from 106.9 billion euros, meaning their NPE ratio would fall to 34 percent from 51 percent.
Alpha said provisions for bad debt fell 26.5 percent quarter-on-quarter to 257 million euros from 349.7 million in the second quarter.
Non performing credit (NPLs) - loans past due for more than 90 days - rose to 38.3 percent of its book at end-September from 37.8 percent at the end of June, with NPEs at 53.2 percent compared to 52.6 percent in the second quarter.
Alpha reduced its borrowing from the European Central Bank and the Bank of Greece by 1.9 billion during July to September to 20.9 billion euros. (Reporting by George Georgiopoulos; Editing by Ruth Pitchford)
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