How bad is investor confidence in Athens? So bad that a medium-sized unit of Greece’s largest bank is now worth more than its owner.
Today’s 30 percent rout in National Bank of Greece puts the lender’s market capitalization at about 2.97 billion euros ($3.26 billion). Finansbank AS, owned by NBG and only the seventh-largest among peers on the Borsa Istanbul, trades at about 3 billion euros.
The reversal is all the more striking considering Turkey is mired in political turmoil of its own. Turkey has been without a government for 56 days after inconclusive elections, and the interim cabinet is tangled in a two-front war against Islamic State fighters and Kurds on its border.
“The fact that NBG’s market cap fell below that of its Turkish subsidiary Finansbank emphasizes the state of disarray and confusion that continues to reign in Greece,” said Stuart Hackett, a trader at Istanbul brokerage Oyak.
With the lira down 7 percent this year, the currency in which Finansbank trades is also one of the few major currencies to have lost value against the euro in 2015.
Finansbank is also shoring up its parent’s earnings. While NBG posted a 66 million-euro profit last year, the Turkey unit contributed 318 million euros to that, according to an investor presentation.