Irish

Friday 1 August 2014

Just one in five loans transferred to NAMA is performing, report reveals

Colm Kelpie

Published 17/01/2013|05:00

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Percentage of non-performing debt that is four months in arrears

LESS than one in five of the loans transferred to the National Asset Management Agency (NAMA) was performing by the end of September last year, latest figures show.

The agency's latest quarterly report reveals that €17.6bn worth of loans were in trouble.

The document also shows that 72pc of the non-performing debt was four months in arrears.

In June last year, 19pc of the bad bank's loans were performing but the figure had slipped to 17pc by the end of September.

The value of the non-performing loans was listed in the accounts as being originally worth €59.5bn by banks before they were transferred to Nama. However, the agency now values them at €17.6bn.

A Nama spokesman reiterated the agency's position that the reduction in performing loans was due to the fact that incoming generating loans were sold off as there was a greater benefit from the sale than holding on to them.

The quarterly report also highlighted that the bad bank recorded a net profit between July and September of €141m, and that its cumulative profit for the year to the end of September was €363m.

Nama said it had appointed receivers in 319 cases with total loan values of €1.45bn for the three months to the end of September.

Five legal cases were issued by the Nama group in the quarter.

In a cover letter to Finance Minister Michael Noonan with the accounts, chairman Frank Daly and chief executive Brendan McDonagh said the agency had taken in more than €10bn in cash from borrowers since it was set up.

The bad bank issued its end-of-year review earlier this month, which revealed the agency has made €6.9bn from the sale of 3,900 properties since it was set up in 2009.

It threw off €4.4bn in cash over the past year alone and is sitting on a cash pile of €3.6bn.

Income

The huge income being generated by the state agency is a mix of rental income from NAMA-linked property as well as the proceeds of assets sales.

The €4.4bn in cash that NAMA took in over the course of 2012 was made up of €1.3bn in rents, interest and other "recurring income" plus €3.1bn made by selling loans and property.

A relatively minor €300m in start-up costs has already been repaid to the Department of Finance.

NAMA will only break even when the debt to the banks has been repaid, ideally over the 10-year life of the agency.

Any cash left after that would mean a "profit" to the State, though only if losses in the wider banking sector are not taken into account.

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