National Bank of Greece (NBG) Stock Plummeting as Greek Debt Negotiations Fall Apart

NEW YORK (TheStreet) -- Shares of National Bank of Greece (NBG) are slumping by 16.08% to $1.07 in pre-market trading on Monday morning, as talks between Greece and its creditors collapsed over the weekend.

Concerns over the possibility Greece could default on its debt have arisen once again.

For months Greece and its creditors have been holding tense discussions regarding how to keep the country from defaulting and possibly exiting the euro zone.

Over the weekend talks collapsed as neither side could resolve the issue over reforms, CNBC.com reports. European officials are blaming the collapse on Greece for not offering a concession on reforms in exchange for the release of some much needed aid.

Yanis Varoufakis, Greece's finance minister, ruled out the country's exit from the euro zone in an interview with a German newspaper, CNBC.com noted. The finance minister said that Germany needs to take on a larger role in the discussions.

Varoufakis also said that a deal will only be possible if Germany's Chancellor Merkel takes part in the talks, CNBC.com added.

Greece has a 1.5 billion euro loan payment due to the International Monetary Fund at the end of this month.

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 several 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, poor profit margins and weak operating cash flow."

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 168.5% when compared to the same quarter one year ago, falling from $249.36 million to -$170.78 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, NATIONAL BANK OF GREECE's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for NATIONAL BANK OF GREECE is currently lower than what is desirable, coming in at 28.20%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -11.29% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$385.60 million or 192.98% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: NBG Ratings Report

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