National Bank of Greece (NBG) Stock Falling as Greek Debt Deal Talks Continue

NEW YORK (TheStreet) -- Shares of the National Bank of Greece (NBG) are down by 4.64% to $1.34 in mid-morning trading on Wednesday, as optimism turned to doubt that a deal between Greece and its creditors to keep the country from bankruptcy was close.

Greece's Prime Minister Alexis Tsipras is said to have told associates that creditors had rejected a proposal from the government regarding a bridge to the budget gap, a government official told Reuters.

Tsipras had made the comment prior to his departure for Brussels where he is meeting with the heads of Greece's three creditor institutions, the European Commission, the European Central Bank, and the International Monetary Fund.

Yesterday shares of the National Bank of Greece rose on reports Greece and its creditors were close to reaching a deal that would keep the debt strapped country from bankruptcy.

"It's clear that it's not yet a done deal. It will be a Greece-watching day, looking at rumors and comments out of these meetings," KBC strategist Piet Lammens told Reuters.

Greece needs to make a 1.54 billion euro ($1.75 billion) debt payment to the International Monetary Fund at the end of June.

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, 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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