Tuesday 20 March 2018

Big British building projects get most of NAMA's €880m in loans

Donal O'Donovan

Donal O'Donovan

THE National Asset Management Agency has signed off on €480m of new loans to finish projects in the UK but just €401m for projects at home.

Figures published by NAMA last night show the agency has approved a total of €880m in fresh loans to developers to fund the completion of building projects. So far, €740m have actually been drawn down.

Finance Minister Michael Noonan told the Dail that less than a quarter of all NAMA loans are fully up to date and meeting all obligations.

Projects in the UK get the lion's share of funds, even though most NAMA assets and projects are in Ireland. NAMA can finance such huge advances from proceeds of property sales and from its own borrowings or "NAMA bonds".

Last night Sinn Fein charged the Government with pumping money into the UK economy, instead of supporting jobs at home.

A spokesman for NAMA said decisions on which projects to advance money are taken on a purely commercial basis.

"NAMA will only provide additional capital to projects that are commercially viable and only in cases where the additional capital will deliver a better return for the taxpayer than would otherwise have been the case," NAMA said in a statement.

NAMA has approved almost €1bn of loans to developers to pay for the completion of work at sites and debtors' working capital, according to the new data.

Half of all of the cash to developers has been approved for sites in the UK, compared with 41pc in the Republic.

Much of the cash is going to big projects in prime London developments -- where developers such as Sean Mulryan are finishing out major projects on the Thames at Nine Elms and in the London docklands.

Just 1pc of the new loans are going to projects in Northern Ireland, even though around 5pc of NAMA assets are in the North. Sources say much of the Northern Ireland portfolio is development land.

Meanwhile, Mr Noonan told the Dail that fewer than 3,000 of the almost 12,000 loans owed to NAMA are fully up to date and meeting all obligations.

He added that NAMA made €249m less in interest payments in the first nine months of 2011 than it states in its official financial accounts.

The interest is paid on the €72bn of property loans that the bad bank holds.

The minister revealed the discrepancy in a written answer to Sinn Fein's Pearse Doherty.

According to NAMA's accounts, the bad bank generated €786m in interest payments in the first nine months of 2011. However, just €537m was actually paid over the same period, according to the minister.

The difference between the accounts and the reality comes because NAMA's financial statements conform to international accounting standards, a spokesman for NAMA said.

Under these rules NAMA calculated its income from interest payments based on an annual average of the total amount the agency is owed, not the amount of cash collected.

The accounting treatment is set down by the Comptroller and Auditor General, the spokesman said.

Irish Independent

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