October 14, 2015 / 3:23 PM / 4 years ago

UPDATE 1-Greece's Piraeus Bank says Q2 pre-tax profit up 2 pct q/q

* Q2 pre-tax profit at 275 million euros

* Non-performing loans at 39.4 pct of book, slightly up from Q1 (Adds figures, details)

By Angeliki Koutantou

ATHENS, Oct 14 (Reuters) - Piraeus Bank, Greece’s second-largest lender by assets, said on Wednesday second-quarter pre-tax profit rose 2 percent compared to the previous quarter.

Piraeus Bank, majority owned by Greece’s HFSF bank rescue fund, and the country’s three other big lenders, National , Alpha and Eurobank, are undergoing ECB stress tests to determine their capital shortfalls.

Results of the health checks are expected by the end of October.

Providing a performance update before results due by the end of the month, the bank said recurring profit excluding tax and provisions came in at 275 million euros ($314.5 million) in the April-to-June period.

Greek banks, hit by bad loans which increased during the country’s debt crisis, have suffered in recent months as political uncertainty and protracted bailout talks with creditors prompted a flight of deposits of 42 billion euros from December to July.

The imposition of capital controls and a three-week bank shutdown in late June put a further burden on the sector.

Non-performing loans, which are more than 90 days past due, rose to 39.4 percent of its book in the April-to-June period, from 38.9 percent in the first quarter.

Deposits fell 15 percent, to 38.8 billion euros, in the second quarter.

Net interest income fell 4 percent versus the first quarter to 472 million euros, due to increased reliance on European Central Bank’s emergency funding as a result of the deposit run and the lack of access to interbank repo markets.

Total central bank borrowing, including funds borrowed from the ECB, rose 23 percent compared with the first quarter, reaching 37.3 billion euros. It stood at 35.8 billion euros at the end of September. (1 US dollar = 0.8744 euro) (Additional reporting Lefteris Papadimas; Editing by Adrian Croft)

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