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National Bank of Greece (NBG) Delisting Process to Begin

Zacks Equity Research

American depositary receipts (“ADRs”) of National Bank of Greece S.A. NBG are in the process of being delisted, as announced by the New York Stock Exchange (“NYSE”) on Nov 27. The move comes on the heels of nearly a 14% value decline on Friday and a year-to-date slump of 91%.

The NYSE initiated the proceedings to delist the American Depositary Shares (each representing one ordinary share) trading under the ticker symbol “NBG” as well as American Depositary Shares, Series A (each representing one Non-Cumulative Preference Shares, Series A) trading under the ticker symbol “NBG PRA”. The ADRs were suspended immediately.

Reasons for Delisting

While the year-to-date plunge of 91% was a major factor, the exchange stated that the National Bank of Greece is no longer suitable for listing based on “abnormally low” prices of the ADRs, pursuant to Section 802.01D of the NYSE Listed Company Manual.

Also, the bank failed to meet the trading standards and also failed to cross the $1.00 mark since mid-July, resulting in the NYSE’s determination to delist the bank’s ADRs.

Moreover, the bank recently sold new equity at a discount of 90%. Also, the bank had earlier said that common shares would not be trading in Athens between Nov 30 and Dec 2. Notably, the bank’s recapitalization plan involves massive dilution and a 1-for-15 reverse split.

National Bank of Greece has been making efforts to raise capital along with other three major Greek banks including Alpha Bank, Eurobank and Piraeus Bank after the results of the European Central Bank (ECB) stress tests divulged a capital deficit of €14.4 billion under the adverse scenario at these banks.

Road Ahead

While the NYSE will apply to the Securities and Exchange Commission (“SEC”) to delist the bank’s ADRs, National Bank of Greece holds the right to appeal the decision to a committee of the board of directors of the NYSE.

The bank’s struggles in raising capital to meet the shortfall followed by the trading halt on Friday and the NYSE’s determination to delist the bank’s ADRs are bound to shake investors’ confidence in the stock.

Investors interested in foreign banks can have a look at Banco Macro S.A. BMA, Grupo Financiero Galicia S.A. GGAL and National Australia Bank Limited NABZY. All these stocks sport a Zacks Rank #1 (Strong Buy).

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