Greece on the cusp of default

[SharperDingaan]

 

(1) Realistically, NBG's credit rating can be no better than the sovereign; so a downgrade to junk

(2) With junk ratings NBG can't access global markets without a higher rated sponsor; so why would there not be all kinds of writedown surprizes, & indirect EU guarantees, over the next little while? 

(3) At its 2.60 low NBG had lost roughly 68% of its value in 6 months, yet today (3.38) its 30% above that low?; risk isn't being priced in. 

 

Against that .... a very useful TSX listing with pricing in USD

Lots of possibility here, but not until the knives stop falling

 

SD

[SharperDingaan]

 

Interesting AR. Notable is the practice of taking deposits from customers, guaranteeing the principal & stated return, then investing the proceeds in greek government bonds. Ordinarily the bank would make a healthy spread - but if the bonds ever took a haircut ... its NBG's problem & not the customers.

 

Pg 39 shows assets by rating. If most of their assets move down one category (probable), they also have a material hit on their regulatory capital. Either they get more equity (dilution) or they start foreclosing (writedowns)

 

SD