Nama planning to sell €500 million of property assets

The National Asset Management Agency is in “advanced discussions” on the disposal of about €500 million worth of properties, chief executive Brendan McDonagh said today.

Speaking at the Richard Cantillon School on Economics in Tralee, Mr McDonagh said the agency was determined to meet a target in its business plan that 25 per cent of its outstanding loans – about €20 billion – will be paid off by 2013. He said Nama was preparing to undertake enforcement proceedings this year against defaulting “if necessary”.

“It’s in taxpayers' interests that borrowers be given the opportunity to make a pitch as to how they can pay down their loans. But if they’re incapable or unwilling to do so, we will move quickly to enforcement proceedings,” he said.

Mr McDonagh said the country was currently “in the middle of the storm”, but the Irish scheme would ensure the losses accumulated by Irish banks were recognised more quickly than in other countries offering similar scheme and would provide liquidity to allow the banks to recommence lending.

“The costs involved in recapitalising the banks to deal with losses on Nama and non Nama assets are considerable and indeed they are very painful for the ordinary citizens to swallow let alone comprehend,” he said. “But the important point is that, as [Central Bank governor Patrick] Honohan said recently, they are manageable from the sovereign perspective.”

Uncertainty about the final cost of bailing out the Irish banking system and taking billions worth of toxic loans off their books has caused Irish bond spreads to widen in recent months, and the yield demanded by investors to buy Irish debt has risen above 6 per cent.

Almost €23 billion has been put into Anglo Irish Bank, which was nationalised in January last year. Today, Anglo Irish Bank's chief executive Mike Aynsley said €25 billion is a "pretty good estimate" of the total bailout cost for the bank.

"There will be some adjustments to that," he said in an interview on Bloomberg Television. "It's not possible to entirely predict the exact numbers. But we feel that we're really coming to the end of the process now and we're not very far away."

Additional reporting: Bloomberg