Madam, – Nama is not an assets management agency. Nama is a loans recoveries and realisations agency. That work is tough, difficult and challenging.
The Government has designed Nama in such a way that it will absolve the banks of the consequences of their extremely bad lending in the amount of €77 billion. It was that €77 billion bad lending, and more besides, which forced the State (that’s us) to guarantee all the liabilities of the banks, amounting to €420 billion!
The Government has further arranged things so that Nama (that’s us, the taxpayers) will buy the €77 billion bad loans from the banks. The €77 billion is made up of two categories of loans, €30.8 billion performing loans (which provide some income) and €46.2 billion non-performing loans (mainly secured on development land having doubtful, little or no value).
Qualified experts with huge professional experience agree that it would be extraordinary, bordering miraculous, if all, that is 100 per cent, of the €30.8 billion performing loans are successfully recovered. The facts show that it’s highly unlikely that even as much as 25 per cent of the €46.2 billion non-performing loans will ever be recovered. If 25 per cent was recovered that would amount to €11.55 billion (25 per cent of €46.2 billion). Adding €11.55 billion to €30.8 billion totals €42.35 billion. But Nama (that’s us, the taxpayers) is being asked to pay €54 billion.
So it’s clear that on day one, Nama’s launch date, Nama (us) will suffer a loss of €11.65 billion.
Consider: while the banks will receive an extraordinary absolution of €54 billion for their appalling lending profligacy of €77 billion, we the taxpayers will receive a penance of €11.65 billion (and that’s not even counting the further cost of the unavoidable €2.64 billion for fees to preferred professional advisers).
Now consider the scale of these amounts. One million seconds is 12 days, one billion seconds is 32 years, 11.65 billion seconds is 370 years. – Yours, etc,