What are the shares of Greek banks worth

20 August 2011 / 18:08:14 GRReporter

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Shares of the National Bank of Greece reached 3.75 euro - their lowest value for many decades. The banking giant of Greece has been targeted for many months by investors because of the huge amount of government securities it holds. Although it increased its capitalization, its liquidity is low and thus at present the holders of 10 of its shares may buy a bottle of luxury whiskey with them.
    Shares of Alpha Bank, which only a year ago were worth around 5.70 euros now cost 2.61 euros. 10 of its shares could be exchanged for a protective face cream produced by a renowned company like Vichy. Even lower point reached the shares of the financial empire of Spiros Latsis Eurobank EFG, which got set at 2.21 euros. With 10 shares you could buy two tickets for a movie and a pack of popcorn. For the second one you will have to reach in your pocket.
    When the Athens Stock Exchange closed on Friday, shares of the Bank of Cyprus were traded for 1.07 euros. Obviously influenced by recent events in Cyprus, which portend political instability and have the potential to shake the fragile Cypriot economy, investors withdraw confidence from Cypriot banks. With 10 of its shares one could buy a box of branded tablets for espresso coffee. To less than 1 euro dropped the value of the shares of the Agricultural Bank, their price is 0.65 euros. With 10 shares one can buy two packs of cheap cigarettes.
    The original comparison belongs to the reporters from the economic weekly Kefaleo and in spite of its seemingly fun style it has a bitter taste. For the first time since December 1996 index of the Athens Stock Exchange fell below 1000 basic points. Shares of companies, including banks are offered at sales prices, but investors are just not interested in them. Information that the recession in Greece for 2011 will be above the expected value of 4.5 percent, the inability of government to implement the reforms that it has undertaken, especially its reluctance to privatize, repel people with money.
    Meanwhile, the government of George Papandreou entered in a bilateral agreements with Finland, to which it promises a collateral for almost the entire amount of financial support from Helsinki. 4 more European countries - Netherlands, Slovakia, Slovenia and Austria jumped and requested the same collateral. The deal is characterized by all as a mistake that threatens if not to block, then at least to significantly delay the payment of the rescue package. Another red light for investors.
    All eyes now turn to the two tests of the local financial system, which are conducted independently of one another and using different methodologies. This is about another review of the supervisory Troika of the European Commission, European Central Bank and the International Monetary Fund and the requested by the Bank of Greece inspection made by the consulting firm Black Rock Solutions. The aim of both inspections is to determine how wealthy Greek banks are and to what extent they can survive after being involved in the recycling of the government securities. The amount by which they will be stricken is more than the one originally expected, but the Bank of Greece insists that the situation is controllable and bankruptcies will not occur.
    Anyway, the consolidation of the Greek banking sector was postponed for the end of 2011 when the mission of Black Rock Solutions in Athens will be completed. U.S. experts will study the credit records of the banks that have not been inspected so far. That is considered to be one of the reasons why no bank merger could happen in Greece. After a thorough study of bank credit profile the financial advisers will be able to offer the best options for restructuring the sector. As they did in Ireland, and it had success. Obviously this fact outweighed and caused the Manager of the Bank of Greece George Provopoulos to choose precisely Black Rock Solutions.