National Bank of Greece (ADR) (NYSE:NBG) Meets First IMF Deadline With the Second Payment Due Soon

Steve Hackney - May 12, 2015

National Bank of Greece (ADR) (NYSE:NBG) has started its decline once again, after a promising rise after it met with its IMF obligations. The rise was further supported by extended assistance from the ECB. The bank is the largest lender in the country, as per assets. The decline came amid the Euro group meetings, to be held in Brussels. The bank is due to pay the second installment of $855 million to IMF soon.

The Greek finance minister, ahead of the meeting, stated that the finalization of a deal was highly unlikely. He did, however, state that the likelihood is still there, but the messages received by his country are not encouraging. Just a few days back, NBG had successfully paid off $224 million to the IMF, despite analysts expecting the bank to miss the deadline. After the payment, Greece had blamed its international creditors for slow paced talks. It should, however, be noted that the payments were made by selling six-month treasury bills.

The meeting in Brussels is crucial to making the second payment a possibility since it concerns the bailout terms of the company itself. Greece believes that the IMF and Eurozone are in contradiction, with respect to the fate of the country. The government also states that it faces resistance from the IMF over labor reforms and pension policies. Whereas, the Eurozone has been taking a similar line and has asked to tighten deadlines for meeting fiscal requirements.

Currently, NBG relies heavily on the ECB to increase its cap on the bailout being granted through the liquidity assistance program. Unfortunately, Eurozone has been losing patience with the country, which is one of the factors slowing down talks. ECB had hoped that further limiting the cap, just might pressurize the country to signing a deal with its international creditors. However this has not been the case so far. Additionally, it seems as the ECB would finally increase the cap on NBG.

National Bank of Greece (ADR) (NYSE:NBG) closed at $1.42, after losing 3.4% on May 11. The bank has 3.53 billion shares being traded in the market, with a 52-week range of $0.98-$4.16.

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Steve Hackney

Steve Hackney is a corporate finance professional with over 14 years of experience in cash management and investing. He earned a Bachelor of Science in Finance from Florida State University and holds a Certified Treasury Professional certification. Steve lives in Orlando, Florida with his family.

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