UPDATE 1-Greek banks NBG, Eurobank in merger talks-sources

(Adds details, background)

ATHENS, Oct 5 (Reuters) - Two of Greece's biggest banks, National Bank and Eurobank are in talks on a merger that would create the country's biggest lender, banking sources told Reuters on Friday.

Shares in NBG and Eurobank were suspended from trading on the Athens stock exchange on Friday after a press report that the two were in talks.

Greece's banks are under pressure to consolidate after deep losses from the country's debt restructuring, plus deposit outflows and rising bad loans.

National Bank (NBG) has tried twice to merge with rival Alpha Bank without success. Alpha has reached a deal to buy Credit Agricole's ailing Greek unit Emporiki Bank, beating NBG and Eurobank which were also interested.

"The capital market commission has asked the two banks to comment officially on the press report and the lifting of the trade suspension will hinge on their answer," an official at Greece's securities regulator said.

Two banking sources confirmed there were talks between the banks but would not elaborate on how advanced they were.

NBG and Eurobank did not respond to requests for comment from Reuters.

News website To Vima reported on Friday, citing anonymous sources, that the two banks' managements were exploring a merger.

A merger would need approval from the Bank of Greece and the Hellenic Financial Stability Fund (HFSF), the bank support fund that has started to recapitalise the country's viable banks.

Another option being considered, the news site said, is a three-way merger of National Bank, Eurobank and small state-controlled lender Hellenic Postbank (TT) , which the government decided in August was not viable. Both hold small stakes in TT.

Earlier this week, French bank Credit Agricole said it would sell its Greek unit Emporiki to Alpha Bank

and Societe Generale said it was in exclusive talks to sell its loss-making Greek unit Geniki Bank to Piraeus Bank

(Reporting by George Georgiopoulos and Lefteris Papadimas. Editing by Jane Merriman)

((george.georgiopoulos@thomsonreuters.com)(+30210 337 6437)(Reuters Messaging: george.georgiopoulos.thomsonreuters.com@reuters.net))