Tuesday 28 February 2017

Former HSBC banker did NAMA review work for free

Audit

Emmet Oliver

Michael Geoghegan. Photo: Reuters
Michael Geoghegan. Photo: Reuters

Michael Geoghegan, the former chief executive of HSBC, did his review of how NAMA is working for no fee, the Irish Independent understands.

After being criticised for generous fees and payments to lawyers and consultants, it is believed Mr Geoghegan agreed to do a review of the agency without requesting any fees.

Mr Geoghegan earned millions during his time at HSBC, but hit the headlines in 2009 when he donated a £4m (€4.6m) bonus to charity in the UK.

He gave his report to Finance Minister Michael Noonan last week and it was discussed by the NAMA board earlier this week. The main part of the review was a skills audit of senior staff and directors and changes are expected to follow shortly.

Cash

Meanwhile, it has emerged that NAMA is placing most of its huge cash resources with the Central Bank, rather than the Irish commercial banks. Accounts for National Asset Loan Management Ltd for 2010 show NAMA had €836m on deposit.

Of this, €709m was placed with the Central Bank and €66m was placed with "other banks", which were AIB and Citi. The location of the term deposit accounts was not disclosed.

As the 2010 accounts were signed off NAMA was still completing due diligence on €11.6bn of loans and some of this work is still ongoing, with adjustments to the amounts paid originally by the agency.

The accounts also show that NAMA's balance sheet is in deficit by €1bn, with liabilities exceeding assets by this amount. An impairment provision of €1.5bn was also taken.

The company's loans and derivatives did, however, throw off cash of €836m and this was enough to meet all current liabilities as they fell due.

The agency -- which yesterday unveiled a new website -- is studying the full set of recommendations from Mr Geoghegan. Among those is that the agency needs to build up greater contacts with markets where its assets might be sold off.

Dr Peter Bacon, the originator of the NAMA idea, has criticised the agency for not being prepared to do more deals and sell off assets at a quicker pace.

However, NAMA chairman Frank Daly has claimed to do so could result in fire-sale prices.

Irish Independent

Read More

Promoted articles

Editors Choice

Also in Business