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Monitoring contract cut in half as 'bad bank' speeds up work

A CONTRACT to oversee how banks manage smaller loans bought by NAMA was almost halved in value this week after the toxic loans agency announced plans to speed up its work.

The Irish offshoot of UK plc Capita Group had won the bank monitoring contract earlier in the year and was expecting to oversee how banks managed 1,400 developer-borrowers.

The 1,400 represented all the borrowers whose debt Nama was buying up, less the 100 biggest developers the agency planned to manage itself.

This week, however, Nama announced that 650 borrowers who owe less than €20m would not have their loans transferred to the 'bad bank'.

Nama is also going to manage the top 150 borrowers rather than the top 100.

The net effect is to leave Capita overseeing the way banks manage the loan books of 700 borrowers.

A spokesman for Nama confirmed the number of borrowers within Capita's remit would fall, but was unable to give specifics on the cost saving to the State.

Separately, it has emerged that Nama will not be going ahead with the third tranche of borrowings, which was due to transfer over on Thursday, and is proceeding on an institution-by-institution basis.

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