Moody's Takes A Bite Out of Greek Banks, Again (NBG)

National Bank of Greece SA (NYSE: NBG) is trading lower this morning with Europe after news that Moody’s has downgraded 8 Greek banks to ‘Caa2’ from ‘B3’ in a fresh outlook in Greece.  Other banks in the downgrade are not exactly household names to many Americans (or Europeans) but they were listed as follows:

• Agricultural Bank of Greece,
• Alpha Bank,
• Attica Bank,
• EFG Eurobank Ergasias,
• Emporiki Bank of Greece,
• General Bank of Greece,
• Piraeus Bank.

In local trading, the banks were down about 7% on last look.  NBG shares in New York ADRs are trading down about 7% at $0.78 in fairly active trading.

We have warned over and over that credit ratings downgrades were going to plague anything and everything inside of or closely tied to the PIIGS.  We cannot expect that this is the last downgrade from the ratings agencies.  Moody’s has retained a negative outlook, so don’t be shocked if or when another downgrade comes in a few months.

JON C. OGG