Nama expects to be left with 'rump' of €900m worth of assets

The National Asset Management Agency expects to be left with a "rump" of €900 million of assets and land that it will not be able to shift by its target wind-down date in 2020. This is from a total portfolio of nearly €32 billion of loans purchased three years ago.

Nama chief executive Brendan McDonagh told the Committee of Public Accounts yesterday that this would be mostly land “outside the commuter belts” in Ireland with little or no commercial value.

He suggested that it would be more appropriate to give these assets to the Office of Public Works or another state agency rather than retaining Nama to manage them out.

Nama has sold about €1.2 billion of assets in Ireland and has €12 billion left on its books, in addition to about €9 billion overseas. It has achieved €9.2 billion in disposals – 80 per cent in the UK – and generated income of €4.5 billion, mostly from property rentals.

Objective
However, Mr McDonagh told the committee: "There will be a rump of assets left at the end of Nama's work. Our objective is to sell down everything . . . but they won't all be sold."

He said Nama was now aiming to break even by 2020 rather than registering the €1 billion profit that had been forecast. “It will be closer to break-even,” he told the deputies, adding that this did not take account of €1.5 billion it has provided to banks in “sub debt”.

Mr McDonagh said this was due to factors around the performance of the economy and the fact that it has had to take a €3.3 billion impairment charge on its portfolio to date as property values continued to weaken.

Nama borrowed €30 billion in senior debt to fund its purchase of loans from Irish banks. It will repay €700 million of this next week to bring the total repaid so far to €7 billion.

It expects to have cleared €7.5 billion by the end of this year and a similar amount by 2016, with the balance to be paid off by 2020.

It will also have paid €3.5 billion in interest by the time of its wind-down, he added.

Additional security
Mr McDonagh revealed it has achieved €800 million in additional security from debtors relating to assets that were either "unencumbered" or had been transferred to put them out of Nama's reach.

“We are pursuing each and every debtor for every cent we can get,” he told the committee.

Mr McDonagh also revealed some Nama staff will be subject to a six-month notice period when they leave for new employment.

This is double the time frame currently in place and follows a review by the National Treasury Management Agency, which is the ultimate employer of the Nama staff.

The extended notice will apply to new hires and staff who are promoted within Nama. Mr McDonagh said this would help address issues about conflicts of interest when an employee leaves for a company in the financial or property sectors.

Sinn Féin TD Mary Lou McDonald said a "cooling off" period of 12 months should apply.

In reply, Nama chairman Frank Daly said: "I don't think Irish taxpayers would thank us for paying people to sit at home for 12 months."