genlou
8 years ago
Limassol, November 22, 2016 -- Moody's Investors Service has revised its outlook on Greece's banking system to stable from negative. The stable outlook reflects the rating agency's expectation of funding and profitability improvements for Greek banks balanced against sizeable problem loans and limited lending opportunities. The outlook expresses Moody's expectation of how bank creditworthiness will evolve in Greece over the next 12-18 months.
Moody's report, entitled "Banking System Outlook - Greece: Stable Outlook Reflects Improved Funding and Profitability Prospects Balanced Against Still Sizeable Problem Loans" is available on www.moodys.com. Moody's subscribers can access this report via the link provided at the end of this press release.
"We expect banks in Greece to return to marginal profitability in 2016-17 on the back of significantly lower loan-loss provisions, decreased funding costs and contained operating expenses," says Nondas Nicolaides, Vice President -- Senior Credit Officer at Moody's and author of the report.
Greek banks have been able to regain access to the inter-bank repo market, reducing their emergency liquidity assistance (ELA) balances and improving their funding and liquidity profiles. However, Moody's notes that they are likely to remain highly reliant on central bank funding over the outlook period.
Banks in Greece will also continue to face significant challenges in tackling their huge stock of problem loans. Moody's expects the volume of non-performing exposures (NPEs) to remain high at more than 40% of total lending by year-end 2017 from around 45% in June 2016.
In addition, despite a modest pick-up in growth, economic activity, consumption and new investments are likely to be limited, constraining banks' loan and revenue growth, in Moody's view. The rating agency's sovereign team expects real GDP growth in Greece of 1.8% in 2017, up from a forecasted 0% for full-year 2016.
Furthermore, while capital ratios are sound -- the rating agency estimates Greek banks' weighted-average common equity Tier 1 (CET1) ratio at around 17% as of June 2016, which comfortably meets regulatory requirements -- around half is in the form of deferred tax assets (DTAs), which Moody's considers to be lower quality capital. This is due to the fact that their eligibility to be converted into deferred tax credits (DTCs) and ultimately into tangible assets, is contingent on the Greek government's creditworthiness that is currently weak as indicated by the sovereign rating of Caa3 (stable).
Finally, Moody's does not expect banks in Greece to benefit from any government support going forward. The government has limited financial strength and its heavy reliance on official creditors' funding displays its minimal capacity to support the banking sector, according to the rating agency.
Subscribers can access the report at: http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_1042014
Enterprising Investor
8 years ago
KKR to Help Manage Two Greek Banks' Problem Loans (5/17/16)
ATHENS-- KKR & Co. has signed an agreement with two of Greece's leading banks to manage up to EUR1.2 billion ($1.35 billion) of their problem loans, the latest effort by the struggling Greek banking sector to restructure bad debts festering on their balance sheets.
The U.S.-based private equity group said in a statement it will help manage underperforming assets owned by Alpha Bank and Eurobank, Greece's third and fourth largest lenders respectively, via its platform, known as Pillarstone.
Pillarstone, which was launched in Italy last year, is also evaluating opportunities to expand the platform in other European countries in the near-term, KKR said.
Greek banks have been reticent to sell nonperforming loans directly to private equity groups. Greek bank executives argue that many of the large corporate loans simply need to be restructured and should not be sold off at a loss to third parties. The KKR platform offers a way round that problem, effectively tasking the private equity group with restructuring loans. The banks and KKR will provide capital. Once they are performing again, they can be returned to the Greek banks' balance sheets.
"The new platform in Greece will provide fresh long-term capital and operational expertise to large Greek corporate borrowers, helping them stabilize, recover and grow for the benefit of all stakeholders," it said in a statement.
More loans from Greek banks may be added to the portfolio of loans to be managed by this joint effort amid a push from local lenders to improve the management of underperforming loans. Greek banks will share in any gains brought on by Pillarstone as they wrestle with a massive pile of nonperforming assets amounting to nearly one in two loans, or about EUR100 billion.
KKR has already rolled out a similar system in Italy. Three banks, Banca Carige, Intesa Sanpaolo SpA and UniCredit SpA are already using the platform. KKR had previously tried to do a similar deal with Piraeus, Greece's largest bank, back in 2014, but the deal collapsed.
Greece is stumbling through its seventh year of an economic slump that has wiped more than a quarter of its economic output and sent unemployment levels to around 25%.
The new asset-management company is being set up as part of reforms to the sector passed by Greek lawmakers late last year that allow for more efficient management of delayed loans. The European Bank for Reconstruction and Development is considering co-investing in partnership with KKR and the banks, the lenders added.
Enterprising Investor
9 years ago
Greece: Debt Talks Fuel Rally In Bank Stocks, GREK ETF (5/09/16)
By Dimitra DeFotis
Discussion about cutting the Greek debt burden at an extraordinary meeting between Greece and its Eurozone creditors helped the Global X MSCI Greece exchange-traded fund (GREK) rise nearly 3% Monday.
Greek bank stocks Alpha Bank (ALBKY), Piraeus Bank (BPIRF), National Bank of Greece (NBGGY) and Eurobank Ergasias (EGFEY) rallied on the positive news. Greek banks got the thumbs up from investor Richard Deitz of VR Capital Group at the Sohn Investment Conference last week.
Things looked more bleak over the weekend, when Greeks took to the streets in front of the parliament building in Athens and unions declared a general strike to show displeasure over more potential pension and other cuts. The Eurogroup is still demanding more austerity contingencies if Greece cannot meet its bailout targets. The risk is that Greece won’t be able to meet its debt obligations in July without an agreement — it needs another release of funds from creditors. For now, Greece won’t have to vote specific measures into law, The Guardian reports.
That was a best-case scenario to come out of the meeting that just ended, according to a note from Wolfango Piccoli at Teneo Intelligence written Friday. He added:
“While our baseline scenario (65% likelihood) remains that an eventual deal is the most likely outcome as it should be possible to reach a compromise on the contingency package that works for both sides, the timeline remains unclear. The risk of snap polls could increase significantly if the lenders decide to play hardball by insisting on a contingency package that Tsipras cannot either accept or get approved in parliament. The Eurogroup meeting scheduled for 24 May could offer the next opportunity for a deal.”
http://blogs.barrons.com/emergingmarketsdaily/2016/05/09/greece-debt-relief-talks-fuel-stock-grek-etf-rally/?mod=BOL_hp_blog_stw
Enterprising Investor
9 years ago
Sohn Sends Greek Banks Up & South Africa Telecom MTN Down (5/06/16)
By Dimitra DeFotis
The four troubled Greek banks — penny stocks that trade over the counter in the United States — are rising after positive comments at the Sohn Investment Conference in New York Wednesday.
Richard Deitz, the founder and portfolio manager at VR Capital Group, with offices in London and New York, said he likes the four big Greek banks after the European bailout and Greek restructuring more than a year ago. Ongoing cost-cutting including layoffs and “little incentive for cutthroat competition” should improve profitability, he said.
“In two years, Greek banks will be in their third year of profitability. At some point it will be clear that the banks are overcapitalized and they will look to return capital,” Dietz told the crowd assembled at the Sohn Conference, which raised $4 million for children’s cancer causes.
UPDATE: Alpha, which has the largest market capitalization among the bunch at $3.5 billion. Deitz’s favorite Greek bank because it trades at roughly 30% of its tangible book value. Alpha Bank (ALBKY) is up 1.7% today, but the big winner is Piraeus Bank (BPIRF), which rose nearly 17% Thursday. National Bank of Greece (NBGGY) was up 9% and Eurobank Ergasias (EGFEY) rose 7%. The Global X MSCI Greece ETF (GREK) is up 3% today.
http://blogs.barrons.com/emergingmarketsdaily/2016/05/05/sohn-sends-greek-banks-up-south-africa-telecom-mtn-down/
Enterprising Investor
9 years ago
Greece's Eurobank prices share offering at 0.01 euros per share (11/18/15)
Nov 18 Greece's third-biggest lender Eurobank priced its share offering at 0.01 euros per share, or 1 euro per share after one-for-100 reverse share split, the bank said in a statement on Wednesday.
The share offering, to fill a 2.04 billion euro capital shortfall revealed in a European Central Bank health check, was oversubscribed, the bank said in a statement. Officials at the bank had told Reuters the orders reached 2.6 billion euros ($2.77 billion). (Reporting by George Georgiopoulos; Writing by Karolina Tagaris)
http://www.reuters.com/article/2015/11/18/greece-eurobank-idUSL8N13D4C420151118#vXv1z4523yVGfqME.97
Enterprising Investor
9 years ago
Wilbur Ross: Own Bank Stocks as Hedge Against Rising Rates (11/16/15)
Billionaire investor Wilbur Ross suggests owning bank stocks as a hedge against the Federal Reserve’s looming rate hike and market volatility.
Since the central bank’s antics are essentially to blame for recent unfriendly investor atmosphere, play it to your advantage, Ross, chairman and chief strategy officer of WL Ross investment company, told Fox Business Network.
“I really blame (Fed Chariman) Janet Yellen and the Fed for being so indecisive and putting so much emphasis on the 25-basis-point hike. There's never been a more programmed thing than that. And it's silly, 25 basis points is really a rounding error but made it into a huge psychological problem. So I blame a lot of the volatility on the Federal Reserve,” he said.
“One way to hedge yourself against rising rates is to own banks.”
Despite the volatility and investing risks, Ross does admit stocks are still your best bet.
“There is no alternative than to be in equities, question is which ones and how aggressively do you buy them at any given point in time,” he said.
An investor and businessman who made his billions advising bankruptcies and restructuring flailing companies, Ross was No. 20 in Newsmax's 100 Most Influential Business Leaders in America.
Ross is a force in the steel, coal, telecommunications, foreign investments, and textiles industries. He spent 25 years with Rothschild Inc.'s bankruptcy practice and then founded investment firm WL Ross in 2000. It was acquired by Invesco in 2006. He has spent the recent years turning around troubled banks, first the Bank of Ireland and then the Bank of Cyprus.
Ross successfully bet on the Irish banking system when it was on the ropes. Ross is known for restructuring failed companies in industries such as steel, coal, telecommunications, foreign investment and textiles. As of June 2015, Forbes listed Ross’ net worth at $3 billion.
Ross, who specializes in leveraged buyouts and distressed businesses, leads a group of investors who last year poured 1.3 billion euros ($1.47 billion), into Eurobank Ergasias, the third-largest bank in Greece, the New York Times said.
To be sure, a top U.S. central banker said that now that the United States is closing in on full employment and inflation is likely to rise to target levels, the "next step" should be to start gradually increasing rates.
San Francisco Federal Reserve President John Williams said there's a "very strong case" for the Fed to raise interest rates next month if the economy continues to improve and policymakers are confident that inflation will pick up.
"Assuming the data are consistent with those (conditions), I think there's a very strong case for starting the process of raising interest rates" at the Fed's next meeting, Williams told USA Today. "The next natural step...is to start raising rates and to do that gradually."
http://www.newsmax.com/Finance/InvestingAnalysis/Wilbur-Ross-invest-Bank-stocks-Rates/2015/11/13/id/702030/
Enterprising Investor
9 years ago
Greece’s Eurobank Rises On Asset Swap, Despite Debt Downgrade (11/04/15)
By Dimitra DeFotis
The Greek bank with the smallest government stake, Eurobank Ergasias (EGFEY), rallied on Wednesday after it launched a tender offer to exchange debt for equity that could help raise billions from private investors.
The Global X FTSE Greeece 20 exchange-traded fund (GREK) fell nearly 5% and other banks tumbled in U.S. trading: National Bank of Greece (NBG) fell nearly 13%, Alpha Bank (ALBKY) fell 12% and Piraeus Bank (BPIRY) fell nearly 15%.
Standard & Poor’s Ratings Services lowered its long-term counterparty credit rating on Greece-based Eurobank Ergasias D (default) from SD (selective default). It also lowered its issue ratings on the bank’s senior unsecured debt to D from CCC- and subordinated debt ratings to D from C.
Eurobank is offering 100% of the nominal value for senior notes, 80% for subordinated debt, and 50% for outstanding preferred securities. S&P says the deal — €877.5 million in securities are subject to the offer — puts the bank in default on its financial obligations. S&P writes:
“The downgrades follow Eurobank’s launch, on Nov. 4, of a tender offer to exchange securities from holders of its Tier 1 debt, Tier 2 debt and senior debt instruments with equity. This constitutes a ‘distressed exchange’ under our criteria because it implies that investors will receive less value than the promise of the original securities. This is because the issuer offers to exchange the securities for an instrument of lower ranking in the issuer’s capital structure. Additionally, we think the offer is not purely opportunistic, according to our criteria, given the financial position of the bank.”
S&P lowered Greek bank ratings to SD in late June after Greece imposed capital controls on bank deposits; controls remain in place.
Over the weekend, European lenders announced Greek Banks need a €14.4 billion ($15.7 billion) recapitalization, including €4.4 billion for baseline stress test requirements and €10 billion for an adverse test scenario. That’s better than feared, The Wall Street Journal notes. National Bank of Greece plans a debt swap and is selling its Turkish arm, Finansbank (FINBN.Turkey), which has tangible book value of €3.4 billion. Alpha bank also plans a debt swap, while Piraeus Bank, with the greatest capital gap at €4.9 billion, will rely on the public stability fund. See the WSJ story “Why the Greek Bank Nightmare Isn’t So Scary,” subscription required.
http://blogs.barrons.com/emergingmarketsdaily/2015/11/04/greeces-eurobank-rises-on-asset-swap-despite-debt-downgrade/
[I missed this article earlier]
OTCRIDER
9 years ago
Greece outlines bank recapitalization plan
By Nektaria Stamouli
ATHENS–Greece unveiled its bank recapitalization framework Friday and is expected to vote it into law Saturday evening, hours after the European Central Bank releases results of its health check on the country’s four big banks.
This will be the third capital increase of the country’s battered lenders since Greece’s debt crisis erupted in 2010 and has to be completed by the end of the year, before the deposit bail-in instrument becomes effective at the beginning of 2016.
According to the draft bill, the lenders will be able to use common or preferred shares, as well as other financing instruments to be bailed in.
The country’s state-owned recapitalization fund, the Hellenic Financial Stability Fund, will cover any part of the capital shortfall that isn’t covered by private investors via a combination of new shares and contingent convertible bonds that banks will issue. The new shares will have full voting rights.
The bill states that the stability fund will participate in the recapitalization of the banks over the coming months with significant funds.
The fund owns majority stakes in all Greek banks except Eurobank, in which it holds a 35.4% stake.
“The government aims to attract foreign investment, with the participation of the private sector [in the recapitalization], but also the state to maintain a significant stake in banks, so it can increase its profit when growth comes,” a finance ministry official said.
“The participation of the public should not be unlimited, as control in banks is needed but not at a stake that would prevent individuals to invest capital,” the official added.
Under the country’s third bailout agreement reached in mid-July, some EUR25 billion, or about $27 billion, of public money was earmarked to recapitalize Greece’s banks, which suffered major depot flight during the six-month-long negotiations between the Greek government and the country’s international creditors.
The ECB is expected to announce Saturday the results of the stress test for Greece’s four largest banks– National Bank of Greece SA, Piraeus Bank SA, Eurobank Ergasias SA and Alpha Bank AS–which will determine how much capital they need following the recent downturn in the Greek economy.
“Overall capital requirements are expected to be at around EUR15 billion, with the banks aiming to raise EUR5-EUR6 billion of that from private investors,” said Wolfango Piccoli, managing director of advisory firm Teneo Intelligence, in a note.
“Another EUR3 billion may come from bond swap offers. This would leave the total size of the required recapitalization from public funds at a manageable EUR7-EUR8 billion,” he said.
This story originally appeared on WSJ.com.
http://stream.marketwatch.com/story/markets/SS-4-4/
legalizeMJ
9 years ago
===ECB stimulus will make EGFEY stock go UP higher.=====
10/22/15 CNBC article:
http://www.cnbc.com/2015/10/22/asian-markets-set-to-rally-after-ecb-hints-at-further-stimulus.html
ECB President Mario Draghi signaled on Thursday that the central bank is prepared to undertake another large stimulus package to tackle the lackluster growth seen in the euro zone.
Anyone who had the stomach to buy C in 2008(when it was a penny stock in 2008) is rewarded richly because C(Citigroup)= more than $50. per share now.
Anyone who has the stomach to buy EGFEY NOW (Oct 2015) will be rewarded RICHLY, too.
EGFEY is Eurobank in Greece
Greek Stock market has been UP, Greek economy is getting stronger,
EGFEY is getting better, EGFEY rating is upgraded by Fitch.
EGFEY is Greece's most prestigious bank stock, EGFEY is one of the big banks in Greece with MORE than 500 branches and 820 ATMs, operating in eight(8) countries. Its total assets is 75.5BL Euro.
EGFEY is smaller than Citigroup, However, Its upside potential is HUGE.
EGFEY stock is at super bargain price.
BUY EGFEY stock to profit.
Go EGFEY Go ***********
legalizeMJ
9 years ago
Citigroup(2008 US bank crisis) vs EGFEY(2015 Greek bank crisis).
1)U.S. banks went down in 2008, C(Citigroup) stock(Bank of America, Citigroup and many big U.S. banks) became a penny stock in 2008 (just like EGFEY stock now), C stock was less than $1. per share, C issued tons of shares to repay its TARP(U.S. loans) debts, lost of troubles that C had been through,....
Now, look what happens.........C stock has been UP, C is alive and well.
2)EGFEY is Eurobank of Greece, EGFEY went down (just like C went down in 2008)......EGFEY will be UP again (just like C) and EGFEY will be alive and well.
Anyone who had the stomach to buy C in 2008 is rewarded richly.
Anyone who has the stomach to buy EGFEY NOW (Oct 2015) will be rewarded RICHLY.
EGFEY is Eurobank in Greece
Greek Stock market has been UP, Greek economy is getting stronger,
EGFEY is getting better, EGFEY is upgraded by Fitch.
EGFEY is Greece's most prestigious bank stock, EGFEY is one of the big banks in Greece with MORE than 500 branches and 820 ATMs, operating in eight(8) countries. Its total assets is 75.5BL Euro.
EGFEY stock is at super bargain price.
BUY EGFEY stock to profit.
Go EGFEY Go ****************
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