Author Topic: EGFEY - Eurobank  (Read 142355 times)

rijk

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Re: EGFEY - Eurobank
« Reply #420 on: May 24, 2016, 11:10:03 PM »
In an agreement announced early Wednesday, Greece won additional pledges of debt relief, but nothing substantial until 2018 at the earliest, and only then if it continues to carry out painful reforms. Even so, the accord could help ease concerns about another flare-up of a crisis in Greece as the region deals with a mass influx of migrants and a continuing terrorist threat.

Eurozone finance ministers also gave a green light for the next round of aid for Greece, money that would allow the country to pay bills in the coming months. Further final approvals for those disbursements will be needed, but ministers allocated 10.3 billion euros, or about $11.5 billion, for Greece, to be distributed in several stages starting with 7.5 billion as soon as the second half of June.


http://www.nytimes.com/2016/05/25/business/international/greece-debt-relief-imf-eurozone-bailout.html


vjrao

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Re: EGFEY - Eurobank
« Reply #421 on: September 01, 2016, 07:02:00 AM »
Eurobank just released Q2 2016 results. I am cautiously optimistic. From the press release:

 Net profit at 46m in 2Q2016 and 106m in 1H2016
 Net interest income up 1.3% q-o-q to 388m
 Fee and commission income up 5.1% q-o-q to 71m
 Operating expenses down 2.0% y-o-y
 Core pre-provision income up 5.8% in 2Q2016 and 16.6% in 1H2016
 First quarter of negative 90dpd formation (-16m)
 Cost of risk 2.0% in 1H2016
 Deposits up by 677m in Greece and 1.1bn in total in 2Q2016
 ELA funding decreases by 4.6bn March-to-date
 Common Equity Tier 1 Ratio at 17.0%
 Consistently profitable international operations: Net profit at 30m in 2Q2016

Links to the press release and presentation are here:
https://www.eurobank.gr/UPLOADS/PDF/PR_RESULTS_Q2_2016_EN.pdf
https://www.eurobank.gr/UPLOADS/PDF/2Q2016_Results_Presentation.pdf

TwoCitiesCapital

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Re: EGFEY - Eurobank
« Reply #422 on: March 24, 2017, 09:23:16 AM »
https://www.bloomberg.com/news/articles/2017-03-23/greek-deposits-bleeding-drama-resumes-amid-bailout-uncertainty

http://www.tradingeconomics.com/greece/capital-flows

If Greece bankrupts its banks again...

Tough situation to be in now that the E.U. called their bluff. Even IMF agrees the debt and terms of the bailouts are unsustainable, but since Greece gave up on its willingness to leave, the E.U. can force it do whatever it wants and Greece will have to do it.

Interested in picking up shares here at $0.25, but was burned badly the first time through...

rijk

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Re: EGFEY - Eurobank
« Reply #423 on: July 04, 2017, 01:59:31 AM »
sounds like this could be a win win deal, eurobank finally makes some progress with restructuring and fairfax gets cheap assets? or are fairfax/pimco simply "stealing" ultra cheap assets? i hope that there has been a decent bidding process......

https://www.eurobank.gr/online/home/ViewNews2.aspx?id=2233&lang=en


TwoCitiesCapital

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Re: EGFEY - Eurobank
« Reply #425 on: November 16, 2017, 07:27:12 PM »
Seems Kyle Bass is bullish about Greece and is long its banks.

https://www.bloomberg.com/news/articles/2017-10-06/bass-bets-greek-elections-called-within-a-year-spurring-rally

https://www.bloomberg.com/view/articles/2017-09-19/the-imf-needs-to-stop-torturing-greece

Eurobank is down another 20% since this - seems like it's getting attractive again @ 20% of book - especially when considering pre-provision income....

But then again, every entry point has simply been a head-fake so far.
« Last Edit: November 16, 2017, 09:26:23 PM by TwoCitiesCapital »

Cameron

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Re: EGFEY - Eurobank
« Reply #426 on: November 16, 2017, 08:50:55 PM »
35.2% of the total loan book is still NPL's and NPE's are still in the 40% range, the texas ratio is still way to high.

They also have $6 billion in equity with $4.9 billion in deferred tax assets. Their RWA leverage ratio is still high.

However there are definitely opportunities in the financial sector, EUPIC is one of my holdings, there are a bunch of areas outside the financial sector. Investing in Greek banks is still playing with fire and the risk reward makes no sense, the likelihood you leave with only a small portion of your capital is still high. So I'm not to sure why he feels now is a good time to invest in Greek banks. 

Just my 2 cents into Greek investing.

TwoCitiesCapital

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Re: EGFEY - Eurobank
« Reply #427 on: November 16, 2017, 09:38:15 PM »
35.2% of the total loan book is still NPL's and NPE's are still in the 40% range, the texas ratio is still way to high.

Yes, but formation was negative over the last quarter which is a nice place to be if the trend continues. And, as Bass points out, if loan growth started again, this ratio would drop dramatically as the denominator would expand with good loans. The ratio would be attacked at both the numerator and denominator and drop quickly IF this is the turn-around for the Greek economy.

Agreed on RWAs, but also doesn't quite matter if the wind is blowing at your back instead of in your face. Every year, a portion of the DTAs would be converted to cash which would be tangible equity.

If you truly believe a recovery is around the corner, it makes sense to be bullish on the banks. It's only if you're wrong that things like the NPEs and tangibility of the RWAs matters.

I'm considering nibbling here even though I was burned before. Will wait for another 2-3 quarters of confirming trends before I take a larger bite for the reasons you have pointed out.

Cameron

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Re: EGFEY - Eurobank
« Reply #428 on: November 16, 2017, 10:32:54 PM »
35.2% of the total loan book is still NPL's and NPE's are still in the 40% range, the texas ratio is still way to high.

Yes, but formation was negative over the last quarter which is a nice place to be if the trend continues. And, as Bass points out, if loan growth started again, this ratio would drop dramatically as the denominator would expand with good loans. The ratio would be attacked at both the numerator and denominator and drop quickly IF this is the turn-around for the Greek economy.

Agreed on RWAs, but also doesn't quite matter if the wind is blowing at your back instead of in your face. Every year, a portion of the DTAs would be converted to cash which would be tangible equity.

If you truly believe a recovery is around the corner, it makes sense to be bullish on the banks. It's only if you're wrong that things like the NPEs and tangibility of the RWAs matters.

I'm considering nibbling here even though I was burned before. Will wait for another 2-3 quarters of confirming trends before I take a larger bite for the reasons you have pointed out.

Thats the problem for me at least I can find cheap companies in Greece but I don't know if that necessarily makes me bullish on Greece from a macro framework. Here is what I'm trying to say, why try to time the Greek recovery through banks that are worth nothing in the event that things don't improve in the near future because they will have to recapitalize the banks soon if they don't which is what it sounds like Bass is trying to do or pick up the scraps that are trading at sub 5 P/E ratios and crazy discounts to book value even after asset write downs that took place 7 years ago that have proven themselves throughout the crisis.

I agree with waiting, the reason being is that lets say the outcome is between the good and best case scenario, I still think shares will be cheap because of the stigma of it being a Greek Bank. It will be interesting to watch.
« Last Edit: November 16, 2017, 10:40:41 PM by Cameron »

Cameron

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Re: EGFEY - Eurobank
« Reply #429 on: November 16, 2017, 11:06:25 PM »
I forgot, about the DTA's, they are an accounting asset and its not an asset that returns capital. In the event that the economy does recover and they can use those DTA's it will have suppression effect on ROE, Citigroup had and still has this problem.

But that assumes that the economy does recover, if they can't use them they are worthless.
« Last Edit: November 16, 2017, 11:09:05 PM by Cameron »