National Bank Of Greece (ADR) (NBG) Stops Bail-out

Banks of Greece experienced a hard time during last week because of its falling stock, so the country commenced meetings, looking forward for the 3rd bail-out. The Government of Greece is looking for the outcome as soon as possible on bailout negotiation.

In the past, after the improvement seen in bailout meetings during the week, Greece was assured about cracking a deal tomorrow. The country is managing to concern with Eastern Central Bank (ECB) for the financial services, as the country is highly determined to dodge another default.

Nevertheless, organizations, such as the International Monetary Fund (IMF), the European Commission (EC), and the European Stability Mechanism (ESM) can also play a great role for them, but the approval is necessary from the country’s parliament for the finalization of the 3rd bail-out.

If the deal would be successful, it will crack 86 billion Euros and 93 billion dollars, if this will not happen Greece could be probably default according to European Central Bank obligation.

On Monday, a Europe Commission representative, Annika Breidthardt, states about the activities of ECB and ESM, “The Commission together with the teams of the IMF, the ECB and the ESM are working day and night and have been working throughout the weekend to finalize the text of the memorandum of understanding and an additional list of prior actions which the Greek authorities could legislate shortly.”

National Bank of Greece experienced a bad time with a significant loss in the business last week; major losses were broadcasted by the country’s bank, which is why the 3rd bail-out is very important for the bank.

This month is a deciding point for a country to meeting the ECB obligation, whose bank sector totally depends on the central bank’s support to meet the ECB obligations. By means of program, called emergency liquidity assistance, institutional investor Central Bank of Europe has prolonged a lifeline to Greek banks. This plan has facilitated the bank to survive and prevent against serious drowning.

In the International market, a question arises about the Greek’s progress in future, analyst are frightened regarding the 3rd bail-out, which the government would need to put extraordinary effort on, if the country takes the helm to rescue from the 3rd bail-out.

Now, in these hard times, Greece feels the necessity for the best evaluated strategies and well planned statistical policies to defeat the recession, and pull the economy together in the country. In fact, the policies that are introduced by government of Greek in the country are truly flopped and not liked by the Greeks.

Nevertheless, majority of the natives casted opposing votes in the internal referendum that clearly viewed the country’s posture. According to today’s report by Athens stock market, National Bank of Greece stock closed at 10.39% at $0.89 earnings per share.

National Bank of Greece Cautiously Bullish Over New Reforms Likely To Be Accepted By The EU

Greece’s banking stock surged after new economic reforms close to being accepted by EU creditors.

National Bank Of Greece’s (NYSE:NBG) stock price may have suffered from a massive decline, going down by as much as 5.75% since the previous day, but overall stock surged for the second day after Greece reportedly handed over new economic reform package that the European creditors deem to be close to being acceptable.

Before that, the Greek financial holding company’s stock price had a choppy trading, settling upon at $1.40m, which was up 0.10 points at an increase of 7.70% from the previous trading day.

Prime Minster, Alexis Tsipras, felt gutted when his own list of proposals fell way short of what the Greek creditors’ revised in terms of the agreement. The new set of measures was handed over the Greek government on Wednesday. Reuters reported that he had attacked the “stance” of certain creditors claiming them as strange who had rejected the budget proposals of Greece to help bridge the budget deficit gap.

The clock is starting to tick for the Greek government here, as it prepares for the upcoming meeting in Brussels with the heads of three creditor institutions, namely European Central Bank President, Mario Draghi; International Monetary Fund Managing Director, Christine Lagarde; and European Commission President, Jean-Claude Juncker.

However, Finance Ministers from the whole EU will gather later on to try and thrash out a deal before the expiration of Greece’s bailout package and the upcoming payment to the IMF on a lump sum basis by the end of this month, while hoping that the current meeting between Greece and the EU trio make a last ditch attempt to make their job convenient. Greece was supposed to pay them in installments before it convinced the IMF to go for a onetime payment to buy time to reach to an agreement.

Greek banks are feeling the heat from being tethered into bankruptcy, as they are concerned about the prospect of a deadlock just as much as they are slightly bullish about the two sides reaching a last minute deal at the 11th hour. It is something at which the EU seems to have developed mastery, as the stakes are so high here that no one can rule out of the particular consequences of a total meltdown in the Greek financial system. This can poison the EU as a whole, if not the whole world. The trend of depositors withdrawing cash from the banks, particularly National Bank of Greece cannot be ruled out.

Bidness ETC - Greek Bank May Be Under Risk of Nationalization As IMF Payments Near, If Not, Past Deadline

It comes as additional headache after Greece and EU report to being too far in their deal.

The news regarding Greece and the European Union that are still far off from a potential deal is not bad enough, there is another pressing matter for Greece to handle bundling its interest payments to the IMF that are due this month. The Greek government has notified to the IMF that all of the June payments will be bundled up, which means that the IMF and other creditors are not to expect any dues to be paid to them until the end of this month.

This means that a total of around less than $2 billion would have to be paid in bundles. Previously, the payments were due by a series in June 5, June 12, June 16, and June 19. This, in a way, means that it will not result in a technical default since it is allowed under the rules, and it gives an indication that the Greeks are trying to buy time as much as they can to give them advantage in negotiation process.

That is why National Bank of Greece (NYSE:NBG) American Depositary Share (ADS) was down to a low of 3%, trading at $1.41 at the NYSE, once the news broke out. However, it only made progress from bad to worse at this moment, and at a 52 week average, stock price closed down more than 8% at $1.34, ranging between as high as $4.16 to as low as $0.98.

It must be noted for investors that the negotiations are not likely to end by this month. This is expected to drag on for months if not years. A no confidence call, which will trigger new elections, does not guarantee that the new regime will abide its commitment to the IMF’s contract and documents – that raises the serious risk that Greek financial holding company might get nationalized if the ugly situation of a Greek default occurs.

The ‘mysterious’ threat of nationalization, even if many do not realize the situation of it, is already resulting in more deposits being withdrawn and that is wearing the bank down significantly. Data from the European Central Bank shows that Greek deposits fell from 145 billion euros to less than 140 billion euros, compared to over 170 billion euros in late 2014. Many Greek depositors know that the bank will be seized and no chance that their deposits will be made a whole into it. This is really stretching the crisis into dangerous territory.