Nama upgrades lifetime State return forecast to €5.2bn

So-called bad bank set to take over remaining Irish Bank Resolution Corporation assets and complete its wind-down by the end of 2025

Nama emerged in 2009 to take over risky commercial property loans from Irish banks. Photograph: Cyril Byrne

The National Asset Management Agency (Nama) has upgraded its projected lifetime contribution to the Exchequer by a further €300 million to €5.2 billion.

The figure includes a forecast lifetime surplus of €4.8 billion and some €400 million of corporation tax it has paid to date, Nama said in a statement on Tuesday as it unveiled its latest annual report.

The so-called bad bank, set up in 2009 to take over risky commercial property loans from Irish banks, posted a €68 million profit last year, its 13th straight year of profitability.

The profit is down from the €81 million out-turn for 2023 and reflects the ongoing reduction in the size of the Nama loan portfolio, which stood at €449 million at the end of 2023, about 1 per cent of the €32 billion paid by Nama to acquire the loans on establishment.

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Nama has upgraded its lifetime surplus forecast a number of times in the past decade from an original position that it would only make enough money to repay its senior debt. It has handed €4.25 billion over to the exchequer to date, including tax.

Nama is set next year to take over the remaining assets of Irish Bank Resolution Corporation (IBRC) during 2025 and complete its wind-down by the end of that year. IBRC carries the remnants of Anglo Irish Bank and Irish Nationwide and has been in liquidation since 2013.

Minister for Finance Michael McGrath recently announced that any remaining Nama assets or activities will be transferred to a newly-established Resolution Unit within the National Treasury Management Agency (NTMA) at the end of 2025.

Nama chief executive Brendan McDonagh forecasts that Nama’s remaining portfolio will have shrunk to about €50 million by the end next year. He said the agency remains involved in 10 active litigation cases. It is he plaintiff in half of these, including cases where it continues to pursue debtors who Nama believes may be hiding assets.

“We have pursued debtors all the way through Nama’s life, and it would not be fair to walk away now,” he said.

Meanwhile, Mr McGrath said that the current slump in commercial property is “manageable in terms of its impact”.

The Central Bank said in a special report on the sector last week that the effect of the downturn – which has seen a 27 per cent drop in commercial real-estate values since 2019 – was having a limited effect on the nation’s banks, as they have much lower exposure to the sector since the financial crisis.

The domestic banks currently have €12 billion of commercial property loans on the books, equating to about 10 per cent of their portfolios.

At the time of the property crash, commercial real estate loans made up 30 per cent of the sector’s combined loans.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times