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National Bank of Greece S.A. Message Board

  • fliujniligui fliujniligui Apr 24, 2010 11:54 AM Flag

    Stress test Alpha Bank and NBG = buy

    http://www.alpha.gr/files/investorrelations/IFRS_AlphaGroup_FY_2009_EN.pdf<
    http://downloads.alpha.gr/FY_2009_Results.pdf

    Alpha Bank (ALBKY) has "only" 2.8 billions Euros in Toxic Greek Government bonds against tangible common equity of 4.254 billions Euros. Risk weighted assets are 50 billions Euros. If Greece defaults and wipe out 40% of bond value in a restructuring, then ALBKY takes 1.12 billions Euros hit, tangible common equity goes down to 3.12 billions Euros and the ratio to RWA falls from 8.5% to 6.3%... still very good. Core tier 1 is at 9% and would fall to 6.8%. NPL are at 5.7%. The thing has a market cap of 3.2 billions Euros in Athens. This is less than the tangible common equity of the business and about equal to what would be left following a 40% writedown in a Greek debt restructuring & default... downside scenario that I would not bet the farm on happening.

    For NBG,there is a lot more toxic bonds but their stake in finansbank worth 6.7 billions $ or 5 billions Euros makes it possible to absorb the 40% writedown without being too dilutive. They have 15 billions in Greek toxic bonds, which means a 6 billions writedown in the downside case. Finansbank sale cancels 5 billions loss, and then the remaining one would go against the 6.3 billions Euros of core tier 1 (equity tier 1) capital and reduce it to 5.3, still well within acceptable limits for NBG. All we have to do is to buy those stocks over time as MM, hedge funds and panickers margin called are vomiting.

    http://www.finansbank.com.tr/en/investor-relations/share-price-data/Default.aspx
    http://www.nbg.gr/wps/wcm/connect/096ad88041cabcf0bee2ff10e8b532e3/NBG+Results+Q409.pdf?MOD=AJPERES&CACHEID=096ad88041cabcf0bee2ff10e8b532e3

    All we need when we invest against the market is good fundamental analysis, great margin of safety on our estimate and downside scenario, and finally sufficient resolve and mental health to hold against the market or even buy more and laugh at our short term pain that with confidence that it represents our long term gain.

    Now I am going to Aerobic dancing group. Will need hell of a good cardiovascular health if I am to benefit from that retirement in 30 years from now... and I think money won't be the limiting factor with these.

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    • I'm paid to both study and work. It is the concept of training. You build human capital and monetary capital at the same time. This is cool, this maintains positive free cash flow at individual level and this allows survival and contrarian attitude while the hysterical market is making share prices fly around in any sense without any consideration for fundamentals. This is so nice to be in a strength position while mess, margin calls, fears, propaganda and speculation are working for you to make next week more bargainful than previous one.

      I'm in Canada, that kind of invincible country economically. Solvent, resource rich and competitive.

    • You're blessed with a sharp mind, and aerobics will hopefully keep you well into old age for you to enjoy a very, very comfortable retirement.

      • 1 Reply to supor450
      • I hope it gets so. Still, at 28, I am still learning life. Invested since I'm 16, but no longer living with parents since 1 year. All of this will eventually get integrated together, but now, I find the potential just crazy. For the sharp mind, I missed the resolve, confidence and persistence... It seems Aerobics helps maintain this.

        In fact, it is not just sports, but equilibrium. A thing you discover when you fall in crisis after you left comfort of family house at a so late time... but a thing that make you grow even more than the best succesful contrarian investment in a growth stock. Maybe some would today say that I am in mania... Time will tell if this is the case, but I think I am just unleashing potential of an healthy lifestyle at every level. A thing I failed to recognize existence for 27 years and a thing I had a hard time to figure out for a time.

        I am 1 year from graduating. I hold a bunch of NBG ALBKY and some other stocks in small quantity. I have that exam in 1 year and I can say that I could fail it and be in worse possible sh1t if it happens... become anxious, insecure and take no risk, limit stress and challenge in my life until I do it. However I lived in this mindset too long, and it limits. Now I am taking a reasonable risk, I rush into life. Failure isn't just an option, and I am responsible as well as able to cultivate success. This way whatever happens to NBG is just irrelevant and entertaining.

        This is decisive step in my life, not for profit, but for experience. And for retirement :), I think it will never happen to me... and it will be by choice hehe.

 
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