Nama earned €690m selling developers’ assets, says C&AG
In some cases developers contributed money raised from selling jewellery and luxury goods towards repaying Nama
Nama expects to have earned a surplus of €3.5bn for the State once it has finished its work
State assets agency Nama earned €690 million from selling assets belonging to developers that was not originally held as security for their debts, a new report shows.
The Government financial watchdog, Comptroller and Auditor General (C&AG) Séamus McCarthy, on Tuesday published a progress report on Nama, the body established to take over debt from the Republic’s banks in a bid to rescue them following the financial crisis.
The report shows that up to the end of 2016, Nama earned €690 million from selling 749 “unencumbered” assets belonging to 192 developers.
Mr McCarthy explained that these were assets not held as collateral for the property debts that the developers owed to the banks, and which were passed to Nama.
However, the agency took security over these assets for the developers’ debts, or the clients agreed to give Nama the proceeds from selling them to help repay their liabilities.
In some cases they included properties but others were “non real-estate assets”, according to the comptroller’s report. In some cases developers contributed money raised from selling jewellery and luxury goods towards repaying Nama.
Of the €690 million total, €305 million (44 per cent) came from two developers. The highest amount earned from a single Nama debtor was €181 million and the lowest was €14,000.
Nama paid €31.8 billion to the banks for the loans due from developers who had borrowed heavily during a property bubble that collapsed a decade ago. Those loans were secured against specific properties, but the legislation creating Nama gave it the scope to take control of other assets belonging to the developers in order to ensure that the State was repaid.
Developers had to submit a sworn statement of affairs to Nama, including details of any unencumbered assets when they were agreeing business plans with the State organisation.
According to Mr McCarthy’s report, in some cases the agency carried out asset searches to verify those statements.
Where Nama identified assets during the course of agreeing business plans, it requested the developers to make them available to it.
Nama expects to have earned a surplus of €3.5 billion for the State once it has finished its work.
“By the end of 2016 Nama had generated sales proceeds of €32.2 billion – €21.8 billion through the sale of underlying collateral and €10.4 billion through loan sales,” Mr McCarthy’s report states.
Nama’s founding legislation requires the C&AG to carry out progress reports into the agency’s work and present them to the Oireachtas. The document published on Tuesday was the second such report.