State auditor loses sole Nama audit role as Mazars hired

C&AG had claimed Nama was not-for-profit organisation in seeking to retain sole role

The Comptroller & Auditor General (C&AG) has lost its position as Nama's only auditor as the bad bank this week appointed accountancy firm Mazars to also assess its books to comply with new EU rules.

Nama put the contract for statutory audit services to the agency out to tender in March. Mazars Ireland was formally appointed to the position this week.

The Irish Times first reported last September that the C&AG was actively defending its role as Nama’s only auditor, against concerns among officials in two government departments that this may no longer be possible under EU audit reform laws transposed in Ireland in June 2016.

The Department of Jobs, Enterprise and Innovation and Department of Finance said at the time that C&AG could only audit not-for-profit entities. However, the C&AG responded to the two departments that the bad bank was never designed to make a profit.


News of the C&AG's claims emerged just a week after the State auditor concluded that Nama had lost out on €220 million for taxpayers when it sold its Northern Ireland loan book to private equity firm Cerberus in 2014. Nama has disputed the calculations.

Audit of subsidiaries

Nama’s annual report, published on Thursday, said: “As the Nama group entities are 51 per cent privately owned and operate to return dividends to shareholders, the companies were deemed to be trading for gain and the C&AG is not therefore in a position to audit the statutory financial statement of the Nama group entities after 15 June 2015.”

The report did not name the new statutory auditor. However, it revealed that Nama had set aside €750,000 for the statutory audit of its subsidiaries for 2016.

Nama raised its lifetime profit projection this week to €3 billion from €2.5 billion, marking the latest in a series of such upgrades in recent years as the outlook for the commercial property market improves. The agency unveiled a €1.5 billion net profit for 2016, its sixth consecutive year of posting a surplus.

Set up in 2009, the agency took over more than €70 billion of risky real-estate loans from the country’s bailed-out banks over the following two years at a 58 per cent discount to par value. The bank has since redeemed 98 per cent of the €30.2 billion of senior debt originally paid to the banks for the loans.

The remainder of the senior bonds will be redeemed by the end of this year, it said on Thursday.

Nama’s board also aims to redeem by March 2020 some €1.59 billion of subordinated debt issued to the banks at the time of the loan transfers.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times