Nama pulls contract to manage IBRC mortgage book

Decision on foot of controversy in the UK involving allegations of fraud against Serco

The National Asset Management Agency has withdrawn a recently-awarded contract from UK outsourcing specialist Serco to manage the €1.8 billion residential mortgage book of Irish Bank Resolution Corporation.

The decision has been taken on foot of controversy in the UK where police have been asked to investigate allegations of fraud against Serco staff members relating to a prisoner escort contract operated on behalf of the British government.

The Nama contract was awarded in July, with Serco announced as the preferred bidder in partnership with Pepper Asset Servicing, an Australian financial services group. It was for an initial five years with Nama holding the option to extend by two more.

The board of Nama has now decided to re-tender for the contract next week. It is understood that Nama has no issue with Pepper and the company will be able to re-tender for the contract.


The state agency said that “following issues that have arisen out of the UK Ministry of Justice audit into government contracts held by Serco, and the referral of certain matters to the UK police, along with the timeframes required to prepare for the transition of the loans, the Nama Board has taken a decision not to proceed to contract completion with Serco”.

The contract relates to IBRC's residential mortgage book, which has a par value of €1.8 billion. This is mostly home loans previously held by Irish Nationwide building society, which was merged with the former Anglo Irish Bank under the IBRC banner.

The special liquidators of IBRC are currently seeking a buyer for this book of loans. However, it is understood that there has been very little interest in acquiring the book.

In the event it is not sold, the liquidators will transfer the portfolio to Nama around the turn of the year. As managing residential mortgages is not a core part of Nama’s current operation, the agency has decided to outsource the management of these loans to a third party.

It is understood that Nama took a decision to re-tender the contract rather than negotiate with underbidders from the last process. No financial penalty is thought to apply as a result of the contract being withdrawn.

Nama said it would launch a new tender process for the provision of primary and special services on the residential loans portfolio “early next week”.

The deadline for receipt of tenders will be the end of October and a decision will be made as soon as “practicable thereafter”.

Nama’s contract with Certus to manage the portfolio of loans relating to commercial property, residential investment and development, and business banking that might transfer from IBRC remains in place.

Ciarán Hancock

Ciarán Hancock

Ciarán Hancock is Business Editor of The Irish Times