Ireland’s bad bank, Nama, formally ended operations as a standalone entity on Friday, finally closing the door on Ireland financial crash and bailout.
Established 16 years ago in the wake of the collapse of Ireland’s banks, it was charged with handling the toxic loans they left in their wake.
In all Nama took in commercial property loans with a headline value of about €74 billion at a cost of just under €32 billion.
From the outset, chief executive Brendan McDonagh came under serious pressure. For some, he was selling loans on the cheap and letting developers off the hook; others, including many of those developers, felt the agency showed little understanding of the nature of their business.
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As recently as his final appearance in his current role before an Oireachtas committee earlier this month, he was forced to defend Nama’s record, noting that it “resisted a fire sale of assets” even as it came under pressure from the European Central Bank in its early years.
The fear when Nama was set up was that taxpayers would end up having to deal with a large hole in the State’s balance sheet.
As it transpired, the agency paid down its debt and put €5.6 billion into State coffers in cash, corporation tax payments and transfers of assets to the Land Development Agency, including 1,366 social homes and land expected to deliver another 7,000 homes. It was also a catalyst in the regeneration of Dublin’s docklands.
As part of those efforts, McDonagh was entitled under the terms of his contract to a performance-related bonus of up to €250,000 each year, on top of his €430,000 salary.
[ Nama chief Brendan McDonagh to head NTMA’s development finance agencyOpens in new window ]
Over 16 years, that would come to a tidy sum of €4 million, assuming he met the conditions each year – which, given the outcome, seems plausible.
However, in stark contrast to the bankers whose reckless behaviour landed them, their developer clients and the State in such a crisis, McDonagh is understood to have turned down the bonus on every occasion.
It is perhaps a fitting footnote as the file closes on the agency he led, initially reluctantly, for its entire life.
