Bad bank will be open for business within a fortnight
NAMA chief executive warns defaulters face legal action
Interim NAMA chief Brendan McDonagh. Photo: Frank McGrath
Friday November 27 2009
THE long-awaited National Asset Management Agency will finally begin operations within a fortnight and could start legal action against loan defaulters as early as next year, NAMA's acting and future chief executive Brendan McDonagh said yesterday.
Mr McDonagh reiterated that NAMA will at least break even over its lifetime if the economy begins to grow here. NAMA will probably be able to sell the €16bn worth of British assets it is taking over faster than domestic loans as the property market there recovers faster than here.
About "27pc of our assets are based overseas, mainly in the UK, and we would expect these markets to recover more quickly", Mr McDonagh told a conference in University College Dublin yesterday. "We would envisage that this part of the NAMA portfolio can be realised quickly."
NAMA is buying property loans with book value of €77bn from Allied Irish Banks, Bank of Ireland, Anglo Irish, the EBS and Irish Nationwide at an average discount of 30pc. The transfer of loans may not start until the end of January after the two big banks have received shareholder approval.
Bailout
Mr McDonagh denied NAMA was a bailout for developers, saying the agency would assess each borrower's viability more rigorously and impartially than banks have done to date. "Some borrowers are unlikely to survive this process," he added.
The speed of loan transfers from the five lenders to NAMA would depend entirely "on the readiness of each financial institution in having the information prepared on each individual loan for the NAMA due diligence process", he said.
"Commentators have made the incorrect assumption that NAMA will not take enforcement proceedings against any defaulting borrower in 2010. NAMA will do so if necessary," Mr McDonagh said in a presentation yesterday.
"But each individual borrower must first be given a fair opportunity to present an updated business case within a reasonable timeframe to make a pitch for survival."
While borrowers will get a chance, NAMA "will not waste time with acquired borrowers who do not cooperate and are not willing to be upfront and declare their interests to us", Mr McDonagh said.
NAMA is now recruiting staff and will employ 75 people by the end of next year, with job specifications to be posted on NAMA's website, he added. All staff will get fixed purpose contracts and will have to prove there are no conflicts of interest.
- Thomas Molloy
Irish Independent
