North will lie at mercy of Nama in years to come

 

BELFAST BRIEFING:Nama’s picking up of loans of up to €5bn in the North will likely have a knock-on effect on about 150 companies, writes FRANCESS McDONNELL

IF THE secret of a good gig is to always leave your audience wanting more, perhaps the National Asset Management Agency’s (Nama’s) first sell-out public event in Northern Ireland could be judged a success.

Unfortunately, the agency’s first formal outing in Belfast also left many in the audience feeling they might not have seen the show they bought tickets for.

The Chamber of Commerce, which hosted the Nama event in a five-star city-centre hotel, had billed it as an opportunity to get an overview of the agency, and learn what impact it might have on Northern Ireland.

Nama is expected to pick up loans worth up to €5 billion in the North, which is likely to have a knock-on effect on about 150 companies.

The president of the Northern Ireland Chamber of Commerce, Bro McFerran, believes there is a common misconception north of the Border that only non-performing loans are being transferred to the agency. Up to 40 per cent of loans taken on board by Nama are performing, which McFerran says will have major tax and credit implications for any local companies that find their loans transferred.

The level of confusion and concern about how the agency will operate in the North generated major interest ahead of the visit by Nama executives.

More than 300 people, many from major development companies such as the Carvill Group and PBN Property and all of the major banks, attended.

Headlined by agency board member Peter Stewart, along with Nama chairman Frank Daly and chief executive Brendan McDonagh, there was hope that it would deliver some insight into how the North will fare once the agency acquires loans located in Northern Ireland.

To be fair to Stewart, who is also the chair of Nama’s NI advisory committee, he did warn as he took to the stage that he could not sing or dance and that his jokes might not be funny. But the really important health warning he failed to give was the fact that he was not really in any position to enlighten his audience about what Nama will actually mean for the North.

Stewart promised his audience in one breath that there would be no conflict between the agency’s aim and objectives and the “best interests of the Northern Irish economy”. Then, in the other breath, he warned that Nama aims to achieve the “best possible return for the taxpayer”.

The taxpayer in question naturally is the taxpayer in the Republic. When it comes to Nama, a big question looms over who is looking after the best interests of taxpayers in the North. It is one that perhaps the North’s Finance Minister Sammy Wilson, who also attended, might be able to answer.

Stewart hopes he and his agency colleagues may play a part in “restoring some order to the property market in Northern Ireland”. He assured his audience that Nama would “carefully consider in formulating our strategy and direction, how it will impact upon Northern Ireland”.

But Stewart failed to reveal in any detail how the agency will go about its business in the North. He did reassure his audience that Nama had no interest in either “flooding any sector of the market with property assets” or in “hoarding assets”. But there were no hints about whether it will use a different rating system compared to how it has valued assets in the South.

He was also silent on whether it will look at loans in a Northern Ireland context or on an all-island basis. Nor was there any further indication about Nama’s views on how and when it might seek to offload assets in the North.

Neither Daly nor McDonagh proved to be any more enlightening. All three were gracious, entertaining in some instances and generally affable, but tight-lipped to a degree which disappointed many in the Belfast audience.

No one underestimates that Northern Ireland will be somewhat at the mercy of Nama in years to come. In particular, Stewart has a key role to play in helping safeguard Northern Irish interests once Nama’s full hand is played.

The agency is going to control a considerable landbank in the North, and the repercussions this could have for the local economy are considerable.

Its decisions will influence the fortunes of local firms. They could act to protect jobs, but those decisions could also result in the business demise of certain individuals and companies which may have stretched themselves too far.