National Bank of Greece (ADR) (NYSE:NBG) Continues To Dip Amid Greek Crisis

There is no relief for National Bank of Greece (ADR) (NYSE:NBG) until the Greece crisis stands fully resolved. The shares of the Greece’s one of the largest banks fell following the weakness in the Greek Markets. The Global X FTSE Greece 20 ETF (GREK), which reflects Greece’s broader market, fell by 5.21% to 11.73. The Greek markets hit red as the nation repaid its first 310 million euro installment to the International Monetary Fund (IMF). Greece is still left to pay remaining of the 1.5 billion euros to the IMF as they become due on March 13, 16 and 20.

Read what this analyst has to say about NBG.

Faith in banking diminished

Meanwhile, in a bid to restore faith in the banking system, Greece’s central bank chief Yannis Stournaras said that the banks are adequately capitalized and have no issues of deposit outflows. He added that the ECB is extending full support to the banks, and there is nothing to worry about them. The Greek banks including National Bank of Greece (ADR) (NYSE:NBG) came under pressure after people started withdrawing their cash out of the banks. The rate of such cash withdrawals surpassed the peak of the Greek debt crisis in 2012.

The sudden outflow of public deposits was caused by the fear of Greece’s debt default and its exit from the Eurozone. People of Greece considered money in their hands much safer than in banks. However, the approval to undertake reforms and to keep the bailout deal intact has helped the Greek banks put a break on such cash outflows.

No QE for Greece

However, the things do not get clear with this. The European Central Bank’s head Mario Draghi has refused to extend quantitative easing for Greece as its sovereign papers are junk rates. Draghi had cleared that they will buy government bonds, the yields on which are not lower than its own deposit facility rate of $0.2%. Till date, ECB has already lent $100 billion euros, a sum equivalent to 68% of Greece’s economy. Amid the ongoing turbulent environment, shares of National Bank of Greece (ADR) (NYSE:NBG) plunged by over 5% to further drop by 9.09% to $1.30 during the after-hours session.

Cook Laurie

Cook Laurie

Laurie, a long-time member of the US Markets Daily general assignment reporter who has covered a variety of subjects from breaking news to investigative features, from stock markets to politics, and from neighborhood small business to global warming.