Queues of investors have formed for the National Bankof Greece placement and it is significant that within hours of the book opening yesterday, the offer was oversubscribed many times over, making it certain that the placement will be completed impressively tomorrow (Thursday).
Significantly, yesterday, the first day of the three-day process, the offer was oversubscribed 6.2 times. About 25 minutes after the book opened, €1 billion had been offered, while €5 billion had been raised in three hours.
The strong interest creates reasonable expectations that the final offer price of the HFSF package will be closer to the maximum price range set between EUR 5 and 5.44.
In addition, the activation of the HFSF's option to allocate an additional 2% over and above 20%, of which 17% will be channelled to foreign institutional investors and 3% to domestic institutional and private investors, should be taken for granted. The additional 2% will be distributed proportionally among investors (1.7% foreign - 0.3% domestic investors).
The public offering closes tomorrow, Thursday, and detailed results of the offering will be published on Friday. This will be followed by the allocation of shares to the beneficiaries, while trading of the shares allocated will start on Tuesday 21 November.
A strong lure for investors is the high profitability of NBG, as it estimates a net profit of EUR 1 billion per annum for the 3 years 2023 - 2025, and of course the strong prospects of the domestic economy.
The HFSF is expected to receive EUR 1.1 billion from the sale of the shares.
Most importantly, however, the strong investor response conveys a strong message of confidence in the banking sector and the Greek economy after the recovery of the investment grade rating. The strong investor interest was also reflected in Alpha Bank's big deal with UniCredit, with the Italian bank acquiring 9.6% of Alpha's shares, as it acquired securities through the market in addition to the HFSF shares.
A number of investors have sought to acquire shares in NBG through the placement, however, as a source closely following the process told BD, the international book (17%) "will go to a relatively small number of investors but with excellent quality characteristics".
In fact, since last week, the allocation of NBG shares to foreign institutional investors has been "locked" atypically, following presentations and contacts that the fund's advisors had with major foreign investment houses. It is noted that the HFSF and the government have called for a very careful selection of investors, setting strict qualitative standards, on the basis of which the final selection of investors will be made.
Why the stock is "running" on the ASE
According to stock market sources, yesterday's +5.80% jump in NBG's share price, closing at 5.8 euros, was largely due to purchases by foreign portfolios that could not secure the number of NBG shares they wanted through the placement and rushed to buy from the ASE.
The same sources believe that the strong interest shown in the shares of NBG was what helped the general investment public to see the big Alpha Bank deal with a clearer eye and fueled the broader interest in bank shares on the ASE, with the bank index jumping +5.93%
According to BD, shipowners and big businessmen are participating in the international placement through special vehicles and family offices in order to secure a better position in the allocation of shares.
Among those who will acquire shares in NBG are some of the strongest and best known names from the shipping industry and many other business sectors.
There is also strong interest from domestic institutional portfolios, but these have limited firepower and will de facto acquire a relatively small number of shares.
It remains to be seen what will happen with small private investors, where there is also a lot of interest, interest that is expected to intensify given the discounted share allocation. It should be noted that the HFSF has requested that existing shareholders be given priority in the event of an oversubscription.
Profit of over 1 billion and dividend of 300 million
National Bank promises investors high profitability at least until 2025. According to the prospectus, underlying profit after tax is on a strong growth trajectory and the Group expects to continue to grow, further strengthening the bank's capital position and reinforcing its commitment to enhanced shareholder rewards in the future.
The Group aims to achieve a core profitability after tax of more than EUR 1 billion per annum for 2023 - 2024 and 205, with earnings per share exceeding EUR 1.10 in the same period and a core return on capital of more than 15% for 2023 and 13% for 2024 and 2025.
Regarding the dividend policy, it is specified that the objective is to distribute dividends corresponding to 30% of profits, while specifically for the distribution to be made in 2024 (2023 profits), the objective will be a distribution at a rate of 20% - 30%.