10pc wiped off value of NAMA loans as agency warns of 'major challenge'
THE carrying value of the loans held by the National Asset Management Agency (NAMA) reduced by about 10pc in the first nine months of last year.
The agency said this was due to the successful sale of assets by the bad bank.
The carrying value of the loans acquired totalled €20.7bn at the end of September, down from €22.8bn at the end of 2012, according to its latest quarterly accounts.
Chairman Frank Daly and chief executive Brendan McDonagh, in a letter accompanying the accounts, said NAMA remains profitable despite a "prudent" impairment policy.
NAMA also said it spent €3.4m on preparations to take on loans that are not sold by the special liquidators of the former Anglo Irish Bank, even though it hasn't yet taken on any.
The agency warned that this would be a "major challenge" and said that it has been planning on the basis that it will acquire a significant portion of unsold assets.
"Significant NAMA resources have been dedicated to this integration effort during the year, which will continue in 2014," the accounts said.
The agency this month re-tendered a contract to manage commercial loans assets it will receive from IBRC, citing changes in the expected portfolio since the original contract winner Certus was named as preferred bidder last year. Australian mortgage firm Pepper has been tapped to manage the residential loan book.
NAMA said that it had made an operating profit before impairment of €686m in the nine months to the end of September.
The agency generated €3.3bn in cash during the period, bringing the total cash generated from its inception to the end of September 2013 to €13.9bn.
Since it was set up, the bad bank has overseen the sale of €10bn worth of loans and assets, including the sale of over 7,000 properties across Ireland and Britain.
Loan sales with a nominal value in excess of €3.8bn to date has been completed by the agency.
The quarterly accounts also show that fewer than one in five of its loans were 'performing', with 82pc in trouble.