National Bank of Greece SA, the country’s biggest lender, extended this week’s slide after saying an investor’s interest in covering part of NBG Group’s recapitalization needs is facing hurdles.
National Bank dropped as much as 4.9 percent and was down 1.9 percent to 75.9 euro cents at 1:47 p.m. in Athens. That took the stock’s slide in the past four days to 8.1 percent. The shares have dropped 41 percent since the start of the year, giving it a market value of 931 million euros ($1.22 billion).
Fairfax Financial Holdings Ltd.’s interest in covering as much as 1.5 billion euros of the group’s capital needs “remained at an early stage, given the fact that it required certain changes in the existing legal framework for recapitalization of systemic banks which, in any case, lie beyond the competence of NBG,” according to an Athens bourse filing today.
Greece’s four biggest lenders need to raise 27.5 billion euros after suffering losses in the country’s sovereign debt restructuring last year, the largest in history. National Bank and Eurobank Ergasias SA, which will form NBG Group following Eurobank shareholders’ acceptance of an acquisition offer, need a total of 15.6 billion euros, according to a Bank of Greece report released in December.
“The fact that Fairfax’s interest remained just an interest and didn’t progress could be adding pressure to the stock today,” Euroxx Securities analyst Maria Kanellopoulou said by phone. When an investor looks at covering almost 10 percent of total capital needs and the process can’t move forward “clearly it’s negative,” she said.
Greek Finance Minister Yannis Stournaras reiterated earlier this week that the terms of a 50 billion-euro recapitalization plan, to be completed by the end of April, will follow the existing legal framework.