Nama may deliver surplus of up to €1bn

The National Asset Management Agency (Nama) is likely to deliver a profit on the bad property loans it bought from the Republic's banks when its finishes its work, according to its chairman, Frank Daly.

The organisation reported yesterday that, in 2013, it made a final surplus of €211 million after tax, dividends and a €914 million impairment charge on the value of the properties it holds. This was 7.5 per cent less than the return it made in 2013.

Nama bought more than €80 billion worth of property-related loans from the Republic’s banks in 2009 and 2010 as part of a taxpayer-funded effort to recapitalise them and shore up their balance sheets, which collapsed after the property bubble burst.

Following the publication of its results yesterday, Mr Daly, a former head of the Revenue Commissioners, said that he believed the organisation was ultimately likely to get back more than the estimated €48 billion it spent on acquiring those debts in the first place.

Strong level He pointed out that the agency first had to pay off its own debts. "But based on 2013's results and on the activity that is now under way, the strong level of interest that there still is in Ireland from investors, and the way the property market is going, all of that gives us confidence that we will make a surplus," he said.

Reports yesterday suggested that the figure could ultimately be €1 billion, but neither Mr Daly nor chief executive Brendan McDonagh put a figure on the likely surplus yesterday.

Mr McDonagh said Nama was “well ahead of schedule in getting its job done successfully”. By the end of this year, he said, it intended to pay off €15 billion of its €30 billion in senior debt.

Nama also said that the proceeds from the liquidation of the Irish Bank Resolution Corporation (IBRC) – the entity that absorbed Anglo Irish Bank and Irish Nationwide – are likely to be enough to allow it to repay the €12.9 billion that it borrowed from the Central Bank last year to acquire IBRC's loan and floating charge.

Speaking at the launch of the agency's report yesterday, Minister for Finance Michael Noonan said the liquidation had been successful. "There is likely to be a small surplus for unsecured creditors," he added.

During 2013, the agency reviewed the provisions that it had made for a fall in the values of properties it is holding as security for the debts due to it from borrowers.

Cumulative charge As a result, it decided to take a total cumulative charge of €4.1 billion to account for a fall in value across its assets. In order to bring its 2013 accounts in line with this, it had to provide a total of €914 million, compared to €518 million the previous year.

Nama generated €4.5 billion in cash in 2013. The bulk of this, €3.6 billion, came from asset sales. The agency sold a large number of loan portfolios during the year to mainly overseas investors, beginning with Project Aspen, which included the Garda station on Harcourt Street in Dublin.

The balance of the cash came from other sources, mainly rent. Since it was established in 2009, the agency has generated €18.1 billion in cash, about €14 billion of this from asset sales.

To date this year, it has generated €3.5 billion. This included the sale of loans to developer Michael O'Flynn's companies for €1.1 billion to Blackstone, which is also reckoned to be among the most profitable of deals done by the agency.