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Two names in the hat for 'bad bank' chairman

Finance Minister Brian Lenihan is preparing to name the chairman of the National Asset Management Agency (NAMA) as early as this week -- with two names being hotly tipped in Dublin financial circles.

Niall Fitzgerald, the Sligo-born deputy chairman of media giant Thomson Reuters and former chief executive of Unilever, the household goods behemoth, has emerged as a favourite contender to chair the State-run "bad bank".

Former attorney general and minister Michael McDowell is also believed to be in the final shake-up of candidates.

Mr Fitzgerald (63) worked with Anglo-Dutch Unilever for over three decades and chaired Reuters through its merger with rival Thomson two years ago to create the world's largest multimedia news agency. He took on the deputy chairmanship of the merged entity.

Former Progressive Democrats leader Michael McDowell's comments in the summer of 2006 that stamp duty on property sales should be reformed marked a serious blow to a then-overheated housing market -- as uncertainty over future government policy on the issue triggered a stand-off by potential buyers. However, observers believe his take-no-prisoner reputation would serve NAMA well as it seeks to avoid any perception of being open to political interference.

Mr McDowell is married to Professor Niamh Brennan, who is charged with cleaning up the Dublin Docklands Development Authority's (DDDA) tarnished reputation as its new chairman.

Some €293m of Anglo Irish Bank borrowings associated with the DDDA's disastrous co-purchase of the Irish Glass Bottle site in Ringsend, Dublin, are destined to count among the first of the toxic loans to be transferred to NAMA.


Government sources suggested yesterday that an announcement on the chairmanship could come later this week, though they said this was dependent on how today's Budget was received. Further boardroom appointments are expected over the next month to support NAMA's chief executive Brendan McDonagh as the agency prepares to take over the first tranche of bank loans.

Analysts have become more cautious in recent weeks about the "discounts" facing banks on the €77bn of loans they are hoping to transfer to NAMA.

This comes after Allied Irish Banks and Bank of Ireland rowed back on previous assumptions that their NAMA-related discounts will come in well below an average 30pc estimated by the Government.

Leading property agent CB Richard Ellis has warned that the combined effect of the new 80pc windfall tax on development property, a ban on upward-only rent reviews and recent flooding mean the Government is going to have to cut its current market valuation for the NAMA-bound loans.

The deeper the discounts, the more capital the banks will need to rebuild capital reserves -- to make them financially sound to lend into the wider economy.

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