Nama makes €293m loss on sale of debtor loans

The National Asset Management Agency made a loss of €292.9 million on the disposal of various debtor loans in the first nine months of last year, according to its latest set of unaudited accounts.

It is understood that this relates to the sale of a large portfolio of assets in Northern Ireland last year, which resulted in a loss being booked.

However, the State agency made a profit of €150 million on the sale of property assets to leave it with a net loss on disposals in the nine months to the end of September 2014 of €143 million.

This loss widened to €754 million when existing impairment provisions of €611 million, relating almost entirely to the loan sales, were recognised in the latest accounts.

Nama’s accounts show that it generated proceeds of €6.87 billion in the first nine months of 2014. This comprised €3.54 billion from property deals and €3.2 billion in loan sales.

When the period from Nama’s inception in late 2009 to the end of September last year is considered, a brighter picture emerges on disposals.

The agency has netted just under €22 billion in proceeds - €16.9 billion from property sales and just more than €5 billion in loan deals.

It has made a profit of €1.3 billion from the property transactions but recorded a loss of €229 million from loans sales for a surplus of just under €1.1 billion. However, impairment provisions of €664 million reduced the total gain for Nama to €432 million.

The quarterly accounts, which were submitted by Nama to the Minister for Finance Michael Noonan, show an operating profit before impairments of €146 million in the three months to the end of September.

Nama continues to book impairments in spite of the upturn in property values and the recovery in the Irish economy with a charge of €57 million recorded for the period.

A tax credit of €45.2 million resulted in Nama achieving a total profit of €134 million for the nine month period.

The strong cash generation in the first nine months of 2014 was largely driven by an increase in disposal activity of large scale portfolio and loan transactions.

Nama told the minister that it generated an additional €1.4 billion in cash to December 19th bringing cumulative cash proceeds to €8.3 billion for 2014 and €23.4 billion since inception.

Nama redeemed €9.1 billion in senior bonds last year, bringing the sum to date to €16.6 billion or 55 per cent of the total in issue.

It had also fully redeemed the €12.9 billion of senior bonds issued in respect of the Irish Bank Resolution Corporation’s loan facility and floating charge.

Nama’s administration expenses for the first nine months of 2014 amounted to €102.2 million.

Staff costs were €30.6 million with overheads and shared service costs amounting to an additional €9.9 million. Legal fees came to €6.9 million for the period.

The agency made almost €147 million available in advances to debtors and for vendor finance.

The accounts also show that Nama achieved non-disposal cash receipts of €661 million between January and September 2014. The par debt held by Nama at the end of the third quarter was €57.26 billion, of which just €4.9 billion related to fully performing loans.

The par value of debts acquired from Irish banks by Nama at inception amounted to €74 billion, for which it paid €32 billion. Nama values the €57.26 billion in par debt still held on its books at €14.2 billion, net of provisions.