National Bank of Greece

I took a look at NBG's Dec 2009 annual report to try to determine its exposure to Greek gvt. debt. Including loans to government and agencies, it appears to have 18% of assets in the Greek government. It is also apparently hedging its exposure to Greek government fixed rate bonds by buying German bond futures. Couldn't find any specifics. I hope it was hedging for rising interest rates!

If Greece defaults, then a fair-ish book value for NBG would be 2.89 USD/ADS share (based on a little algebra from the data at reuters.com). According to Reuters, NBG is trading at 2.71, for a P/B of 0.75. I would buy at 2.50, or a P/B of 0.7, and sell at a P/B of 0.8 (2.89 USD). Keep in mind that as the Euro falls, so does the book value. A P/B of 0.7 at today's exchange rate is not necessarily the same share price as a 0.7 P/B at next week's exchange rates.