If Frank Daly and Brendan McDonagh woke up this morning with a slight ache in their shoulders it's probably because of the amount of back-slapping yesterday by Minister for Finance Michael Noonan at the launch of the National Asset Management Agency's annual report.
“Nama is now a a vital and dynamic component of the recovery and particularly in the construction and development sector,” the Minister told the assembled media.
Before it came to power in 2011, Fine Gael was highly sceptical about the construct of Nama and suggested alternative ways of working through the toxic loans of the five Irish banks bailed out by the taxpayer.
Noonan is now Nama’s biggest fan and he liberally showered the agency’s top brass with compliments yesterday.
“I didn’t think it would be successful as quickly as it had been. I thought it would take longer to get to where it is now, which is why I’ve been strongly complimenting Frank, Brendan and the board,” he said.
There’s no doubt Nama has made significant progress in the 38 months since loans began transferring from the banks. It made a profit last year of €228 million and is on target to have repaid €7.5 billion, or 25 per cent of its senior debt, by the end of this year.
By the end of 2012, it had sold 3,900 properties in assets sales worth €6.8 billion. Just under 26,000 credit decisions have been made to date.
The criticisms of Nama – that it is sitting on land that could be used for social housing or community uses; that it’s screwing tenants with inflated rents; that its Irish portfolio includes a lot of dud sites; and that it is holding back economic regeneration by inaction – were met head on.
About 4,200 sites for social housing have been identified for local authorities. Chief executive Brendan McDonagh said the slow pace of take-up (just 294 have been delivered) was down to the local authorities, not Nama.
Nama has approved 222 applications for rent abatements from commercial tenants, foregoing €14 million in the process. Just 10 applications were refused.
McDonagh and chairman Frank Daly stressed that Nama was making available €4 billion in capital investment and vendor finance to 2016 to kick-start projects and play its part in the regeneration of the economy.
They also argued that the portfolio was better than people thought. In Ireland, 78 per cent was within Dublin and its commuter belt. Roughly one-fifth of the overall portfolio was in London, where the property market remains healthy.
Nonetheless, shifting all its properties within the next seven years, in addition to dealing with whatever loans are transferred by the liquidators of Irish Bank Resolution Corporation, will be no mean feat.
Its success will depend in large part to the pace of economic recovery in Ireland. The old saying that it’s a marathon, not a sprint, could have been coined for Nama.