ALBKY – Alpha Bank

This is a highly speculative play on the Greek banking sector. I don’t pretend to be an expert or even a novice at analyzing banks, let along European Banks, this thesis is more quantitative and based primarily on the length of the financial crisis and the historical precedence. It is best summed up in the following chart:




The financial distress in Greece is currently the longest running crisis in the sample. Additionally, there has been some positive momentum including upgrades from some of the rating agencies.

Stournaras Says Greece May Sell 5-Year Bonds in 2nd Half of 2014

Portugal Said to Hire Banks for Sale of Bond Due in 2019

I am currently long ALBKY common which trades OTC here in US and on the Athens Stock Exchange. 1 common in Athens equals 4 ADR’s in US. I have taken random samples and the pricing is fairly efficient. The reason for this is mainly leverage as the ADR trades for $0.25 currently. NBG is the obvious play and both will likely benefit. SAN is another interesting play on a European banking recovery.

As stated before, valuation is quite difficult. Not to mention accurate share counts as there has been large dilution as well as warrants and debt, all of which is probably outside my pay scale. I will make an attempt to understand these going forward and post any updates. However quickly, using a multiple of Price to Net Tangible Book Value, ALBKY trades at 1x, NBG at 1.8x, SAN at 1.6x

However, the Greek banking system, at least the survivors were forced to make acquisitions. Alpha Bank in particular was forced to purchase Emporiki Bank which leverages it’s fortunes on Turkey of all places. 

Interestingly enough, I have been quite impressed with the disclosures and investment presentations on these banks. I find them far better then many US companies.


ALBKY – Alpha Bank