National Bank of Greece Stock (NBG) Closes Lower After Creditors Meet in Brussels

NEW YORK (TheStreet) -- Shares of National Bank of Greece  (NBG) closed lower by 3.4% to $1.42 on Monday after the European nation's creditors met in Brussels.

The nation is rapidly running out of cash, so the Greek government tried to assuage some fears of an imminent default on its debts by authorizing the treasury to pay a significant loan installment to the International Monetary Fund on Tuesday, according to the New York Times.

The treasury will pay 757 million euros, or about $848 million.

Eurozone finance ministers, IMF representatives, and the European Central Bank met Monday and noted that Greece has made some progress on a proposed list of economic overhauls since a meeting two weeks ago in Latvia.

But the finance ministers, known as the Eurogroup, added that Greece needs to do more work before receiving any more loan aid under the nation's current bailout program. Greece's creditors have insisted that the government make economic reforms on pensions, labor rules, taxation, and other areas.

Separately, TheStreet Ratings team rates NATIONAL BANK OF GREECE as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate NATIONAL BANK OF GREECE (NBG) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • NATIONAL BANK OF GREECE has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, NATIONAL BANK OF GREECE reported lower earnings of $0.15 versus $1.98 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Commercial Banks industry. The net income has significantly decreased by 284.9% when compared to the same quarter one year ago, falling from $760.10 million to -$1,405.19 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, NATIONAL BANK OF GREECE underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 60.87%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 190.90% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • NBG, with its decline in revenue, underperformed when compared the industry average of 0.1%. Since the same quarter one year prior, revenues fell by 23.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: NBG Ratings Report

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