independent

Wednesday 16 April 2014

Bankers paid €57m in NAMA loan fees last year

Charge for managing accounts jumps four-fold since 2010

BANKERS shared €57m in fees paid by NAMA last year for managing bad loans.

The payout represented the single biggest cost in 2011, according to accounts filed for the National Asset Management Agency Investment Ltd (NAMAIL), the so-called "special purpose vehicle" (SPV) set up back in 2010 to bring private investors into NAMA.

The figure means that NAMA paid more in so-called primary servicers fees than the €50m that Finance Minister Michael Noonan expects to raise from hiking vehicle registration tax.

The fees for 2011 jumped four-fold from €13m in 2010 as the level of distressed loans taken on by the bad bank increased.

NAMA has about 780 debtors and manages the top 189 itself.

However, responsibility for managing the accounts of the remaining 591 are delegated to the participating banks, which includes AIB, Bank of Ireland and the Irish Bank Resolution Corporation (IBRC), formerly Anglo Irish Bank.

Fee

A spokesman for the bad bank said NAMA pays the banks a fee which is agreed by the European Commission. It currently stands at 0.08pc of the nominal loan balances administered by them in 2011, up from 0.06pc in 2010.

The spokesman said NAMA would have to boost its own resources if the measure was not in place.

But a breakdown of how much was paid to each bank could not be given.

"If they (the banks) didn't manage it, NAMA would have to increase its resources to manage it directly," the spokesman said.

"The banks would also have a couple of hundred people employed on managing those accounts.

"Clearly if NAMA wasn't paying them to do it, they would have to let those people go and NAMA would have to hire additional resources."

In October, NAMA gave estimates for its 2013 budget and projected the so-called primary servicer fees will total €78m this year, but fall back to €71m in 2013.

NAMAIL is the private company through which private investors have invested in the NAMA group. NAMA holds 49pc of the shares of the company, while the remaining 51pc are held by private financiers.

However, NAMA has the power to exercise a veto over decisions taken by NAMAIL, meaning the private investors' ability to control the financial and operating policies of the body is restricted.

The most up-to-date accounts filed with the Companies Office show that the NAMAIL group made a profit before impairment of €1.279m last year, its second full year of operation.

Receipts from borrowers were €5m, with €4.3m of net cash generated overall from operating activities.

Irish Independent

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