National Bank of Greece (Athex:ETE),(LSE:NBGA),(NYSE:NBG) is a Greece global banking and financial service company with its headquarters in Athens, Greece. The bank offers financial products, and services, brokerage, insurance, asset management,shipping finance, leasing and factoring markets. It was founded by Swiss banker Jean-Gabriel Eynard and George Starvros fouded the National Bank of Greece in 1841 as a commerical bank. From its inception until the establishment of the Bank of Greece in 1928, had the right to issue banknotes. The bank listed on the Athens Stock Exchange right after its founding in 1880s.
Company History & Operations
Was formed in 1841, in Athens making it the oldest bank in the country. It wasn't government owned from its inception, but had the right of note issue, which it lost in 1928 when Greece establish its own central bank. The bank in 1899 aquired the Privileged Bank of Epirus and Thessaly. At the beginning of the 20th century the bank begun its international expansion. In 156 the bank aquired the Bank of Athens, which was at the time the second largest bank in Greece. The bank in 1965 aquired the Greek Tapeza Epagelmatikis Pristis (Professional Credit Bank). In 1966 bank governor Georgios Mavros founded the National Bank of Greece Cultural Foundation. Since the 1999 the bank has been listed on the New York Stock Exchange. In banking sold all its operations in Canada to the Bank of Nova Scotia in 2005. The next year the bank sold its US arm, Altantic Bank of New York, to New York Community Bancorp for $400 million (EUR 331 million) in cash. It used the proceeds from these sells to finance aquisitions in Southern Europe. The National Bank of Greece has suffered since the the Greek Government Debt Crisis. It had to write off more then $19 billion in debt. The bank has over 500 branches in Greece, Australia, Egypt, and the United Kingdom. It has banking subidiaries in Albania, Bulgaria,Cyprus,South Africa, Turkey, and etc.
Finances
The bank has an 8% of capital adequacy ratio and new additional limits of 9% and 6% for Core Tier I and Common Equity ratio in accordance with the new rule established by the Central Bank of Greece. In June, 2013 the bank recapitalization was competed, through the share increase of EUR 9.756 million of which EUR 1.079 million was contributed by private investors and the rest by HFSF. The banks deposits increased by EUR 5 billion in 2013, but because the the Greece Debt Crisis the bank is restricted from access of liquidity from other Financial Institutions. That means the Eurosystem mains a major source of Liquidity for the Bank. As of November 25, 2013, funding the European Central Bank has decreased to EUR 21.9 billion.
Valuation
Earning per share Over the Last 10 years
| Earnings Per Share (EPS) |
| 12/03 2.96 |
| 12/04 6.36 |
| 12/05 15.54 |
| 12/06 18.45 |
| 12/07 25.65 |
| 12/08 16.00 |
| 12/09 9.34 |
| 12/10 -4.46 |
| 12/11 -152.19 |
| 12/12 -26.55 |
The banks average 10 year EPS of -9 per share. 2013 EPS of 3.48 euros is an improvement from the last two years of losses. But the banks earning per share over the last 10 years has been all over the map. It has an Return on Equity of 48.65% and an Return on Assets of 0.52%. The price to book value of 1.5 is unreasonable for the simple reason that no financial institution should sell above book value when its return on assets are below 1.0. For this reason the bank is overvalued and isn't worth paying a premium of above book value for. It may sell a 1 times earnings doesn't mean its cheap. This bank isn't an buy at above book value, but if its price fell below book value then I might buy.
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