***** UPDATE (Dec 10, 2015): National Bank of Greece ADR Resumed Trading on the OTC Market, TFS

UPDATE (Nov 27, 2015): NYSE Delisting National Bank of Greece ADR, TFS

National Bank of Greece(NBG) has decided to do another reverse stock split in the ratio of 1:15 this week. Based on Thursday’s price of the ordinary share at 0.02 Euros the new price of the stocks would be 0.30 Euros after the reverse split is implemented.

From a Reuters article:

National Bank of Greece on Thursday priced its share offering to plug a capital shortfall revealed in the European Central Bank’s health check, at 0.02 euros per share, or at 0.30 euros per share reflecting a one-for 15 reverse share split.

The bank, Greece’s largest lender, said investor demand for the shares, coupled with the results of a debt exchange offer to bondholders, reached about 1.16 billion euros. Its capital gap in the ECB’s baseline scenario was 1.456 billion euros.

National Bank said a public offering of new shares in the Greek market at the same price on or around Nov. 30 aims to raise another 300 million euros.

The bank said that an additional 308 million euros will result from further burden sharing. These will include the conversion into common shares of all capital means.

Source: Greece’s National Bank prices share offering at 0.02 euros per share, Nov 19, 2015

This is the third reverse stock split the bank has implemented in the past five years. The previous splits were 1 for 5 in 2011 and 1 for 10 in 2013. Both the times I suggested that investors avoid the stock.

** NOTE: The actual Record Date and Effective Date for the reverse split has not yet been announced yet. But the decision to do the reverse split has been made.

This time won’t be different. Structural changes are still an issue with the Greek economy. From labor laws to retirement age to tax evasion have not been reformed. Hence investors can avoid investing in NBG for the foreseeable future.

The long-term return for National Bank of Greece ADR from Oct 1999 thru Nov 20, 2015 is an astonishing -99.73% according to Google Finance:

Click to enlarge

Source: Google Finance

The ratio of Ordinary to Depository Receipt is 1:1. Yesterday the ADR closed at $0.18. After the reverse split the stock price will be approximately around $3.60 or so depending on the reverse split effective date.

Here is the official announcement from the depository BNY Mellon published on Nov 25, 2015:

Reverse Split National Bank of Greece S.A.

DR CUSIP: 633643705 / ISIN:US6336437057

DR Ticker Symbol: NBG

Ratio: (DR: Underlying Share): 1:1

Please be advised that National Bank of Greece (“NBG”) has announced a share consolidation of one (1) new share for every fifteen (15) existing shares. As a result, BNY Mellon will affect a reverse stock split on the National Bank of Greece Depositary Receipt (“DR”) program. Effective December 3, 2015, DR holders of NBG are required on a mandatory basis to surrender their DR(s) for cancellation exchange their “OLD” DR(s) (CUSIP #633643705) for “New” DR (CUSIP # 633643804). DR holders will receive one (1) “New” Depositary Shares (“DS”) (CUSIP# 633643804) for every fifteen (15) “OLD” DSs (CUSIP # 633643705). Only whole DRS(s) will be distributed. BNY Mellon will attempt to sell any fractional DSs and distribute the cash proceeds to DR holders.

The Effective Date for the reverse split is Dec 3, 2015.

Related Links: 

• Greek Banks Ask Investors to Take Uncertain Leap of Faith, Bloomberg
• Official News of Reverse Split (1:15) of Common Shares, National Bank of Greece Investor Relations Site
• National Bank Of Greece Reached My Price Target Of Zero – Now What?, Seeking Alpha
• Massive Dilution And Massive Overvaluation At National Bank Of Greece – Shares To Fall Below $0.05, Seeking Alpha
• National Bank Of Greece: 2 More Reverse Splits Or Delist, Seeking Alpha

UPDATE (Nov 27, 2015):

• NYSE Is Delisting National Bank of Greece After 91% Plunge, Bloomberg, Nov 27, 2015

If you are a holder of NBG, What to do now?. You may want to checkout: What to do when an ADR is delisted from NYSE or NASDAQ

You can sell it on the OTC market as NBG is trading under the ticker NBGGY.

UPDATE (Nov 28, 2015):

Since NYSE has started the delisting process, the depository BNY Mellon has stopped any issuance or cancellation of ADRs.

** UPDATE (Dec 10, 2015):

• National Bank of Greece ADR Resumed Trading on the OTC Market, TFS

Disclosure: No Positions