* Profit down at 72.7 million euros, above 67 mln forecast
* Share of bad loans up at 3.7 pct of total loans
* To repay large part of pricey state recapitalisation funds
(Adds bad loans, credit portfolio, overseas unit)
LISBON, Oct 30 Portugal's third-largest listed
bank BPI posted a 38 percent fall in nine-month profit
as net interest income dropped, hurt by a weak economy that also
pushed up bad loans.
The bank also said on Wednesday it would repay early an
additional 588 million euros from the 920 million euros it still
holds in state loans in the form of contingent convertible bonds
carrying high interest payments.
Net profit, that mostly came from BPI's Angolan unit, fell
to 72.7 million euros ($100.1 million), but beat analysts'
average forecast of 67 million euros in a Reuters poll.
BPI's net interest income - the difference between interest
charged on loans and interest paid on clients' deposits - fell
19 percent in the January-September period to 355 million euros
from a year earlier, in line with expectations.
The bank said bad loans more than 90 days overdue stood at
3.7 percent of total loans, or 1.01 billion euros, up from 3
percent a year ago.
Total cumulative impairments for bad loans rose to 947
million euros in September from 823 million euros a year ago.
Still, new provisions and impairments for bad loans set
aside between January and September fell almost 15 percent from
the same period a year ago to 182.5 million euros, helped by
Portugal's fledgling economic recovery that began in the second
The economy is still expected to shrink for the whole of
this year under the weight of austerity measures applied under
an international bailout.
The bank's credit portfolio shrank by 2.5 percent from a
year earlier to 27.5 billion euros.
Profit at BPI's main overseas unit - Angola's BFA - rose
about 4 percent to 59 million euros.
BPI, like its peers, was badly hit by Portugal's downturn,
with more of its loans turning sour, but it still churns out
profits while its rivals BES and Millennium bcp
have been posting heavy losses.
($1 = 0.7262 euros)
(Reporting by Andrei Khalip; Editing by Mark Potter)