* NBG posts 181 mln euro Q1 profit, above analyst forecasts
* Eurobank's Q1 loss of 207 mln euros broadly in line with estimates (Adds Eurobank, NBG CEO comment, details)
By George Georgiopoulos
ATHENS, May 28 Greece's biggest lender by assets, National Bank (NBG), reported higher-than-expected profit in the first quarter, helped by lower funding costs, its Turkish unit Finansbank and reduced provisions for bad loans.
The group posted net earnings of 181 million euros ($246 million) in January to March, its sixth straight profitable quarter. Analysts polled by Reuters were forecasting net profit of 24 million euros on average.
NBG said Finansbank contributed 63 million euros of profit, despite the significant rise in Turkish interest rates and a challenging quarter in that market.
Greek banks have been struggling with rising bad loans during a deep recession which has driven unemployment to almost 27 percent.
Record joblessness has made it hard for borrowers to service their debt, forcing lenders to hike loan-loss provisions, even though the pace is slowing from previous years.
Greece's economy shrank 1.1 percent in the first quarter, year-on-year, but the government and its international lenders expect it to pull out from recession and expand by 0.6 percent in 2014.
NBG said provisions for non-performing loans (NPLs) - credit in arrears for more than 90 days - fell 15 percent year-on-year in the first quarter to 362 million euros. NPLs rose to 23 percent of its book from 22.5 percent at the end of 2013.
"Our unique liquidity position versus our peers in Greece allows us to provide substantive support to the economy at a time when the country is gradually steering out of the crisis and back to growth," Chief Executive Alexandros Tourkolias said.
Peer Eurobank reported a loss of 207 million euros, broadly in line with market expectations, as loan-loss provisions continued to weigh on its bottom line.
The bank, 35.4 percent owned by Greece's HFSF bank rescue fund, said bad debt provisions fell to 479 million euros in the first quarter from 647 million in the previous three-month period with the pace of new impaired loans slowing.
Non-performing credit rose to 30.9 percent of Eurobank's loan book from 29.4 percent in the last quarter of 2013. (Additional reporting by Lefteris Papadimas Editing by Jeremy Gaunt)