The country's second-largest lender by assets reported a net loss of 1.56 billion euros ($1.9 billion) in the third quarter, compared with a loss of 277 million in the same period a year earlier.

Piraeus booked 2.24 billion euros in provisions for impaired credit - compared with a charge of 476 million euros in the second quarter - bringing its loss-reserves against gross loans to 23 percent.

"We took a bold move to clean up the slate and draw a line under the debt crisis, recognising any remaining loan losses identified by the ECB's AQR (asset quality review)," the bank's Deputy Chief Executive Anthimos Thomopoulos told Reuters.

"It's a comprehensive charge-off and an act of confidence based on our conviction that the country has turned the corner. Our view is that the bank will be returning to profitability immediately in the next quarters in 2015," he said.

Greece emerged from a crippling six-year recession as early as the start of the year and has been growing ever since, data showed this month.

Piraeus and Greece's other big banks have been burdened by large problem-loan portfolios due to the recession which has pushed unemployment to nearly 27 percent and made it hard for borrowers to service their debt.

Piraeus, which is 67.3 percent owned by the country's bank rescue fund HFSF, said new non-performing loans (NPLs) slowed for the seventh straight quarter. Loans in arrears for more than 90 days made up 39 percent of its book from 38.5 percent in the second quarter.

The cheaper cost of time deposits helped the group to grow net interest income by 12 percent year-on-year to 509 million euros.

(Reporting by George Georgiopoulos, editing by Deepa Babington and Susan Thomas)