Tuesday 21 November 2017

NAMA on course to repay €7.5bn in debt as it makes €222m profit

Donal O'Donovan

Donal O'Donovan

State's bad bank making more money from managing assets than loan disposals

NAMA said it made a €222m profit in the first half of the year and is on course to hit its first major milestone by repaying €7.5bn of debt next year.

The National Asset Management Agency (NAMA) has published its financial accounts for the second quarter of 2012.

The accounts show NAMA made a net profit of €222m between January and the end of June, after taking account of an impairment charge of €128.6m.

Profits dropped in the April to June period to €89m, however.

The latest accounts show that NAMA is generating far more from managing its assets than from loan disposals. It took in €685m in interest and management fees in the six months to the end of June, compared with €115.4m of profit generated on disposals.

Performing

Less than a fifth of the €72bn loans controlled by the agency is fully up to date, or "performing" according to the latest figures released yesterday.

NAMA paid just €31bn for the assets and has now valued the portfolio at €24.8bn. The value of the portfolio has dropped thanks to €7.9bn of asset sales achieved by the agency, but also due to a €2.9bn write-off in the value of some remaining assets thanks to falling property prices.

NAMA said it has generated €8.1bn in cash from borrowers since it was established. Money raised comes from a combination of asset sales, debt repayments and rental income.

It cleared €1.34bn of new lending from the time it was set up to the end June for finishing out stalled projects.

Much of the lending approved to date has been to develop sites in the UK, but rolling out that investment programme in the domestic market has been identified as a key target for 2013.

Ultimately NAMA has said it will invest €2bn in Irish developments by the end of 2016.

The agency is also targeting an increase in "portfolio sales" of bundles of loans targeted at international investors.

In its forward-looking "Annual Statement for 2013", also published yesterday, it said loans with a value of over €1bn have been sold in this way and sales are expected to increase in 2013 thanks to an active marketing effort.

Expenses

In the same document NAMA said it intends to cut operating costs by 16pc to €140m next year, including by cutting its legal expenses from €25m to €13m next year.

The agency said it has paid off €300m in start-up costs owed to the Government and €3.25bn of the debt used when it acquired property loans from the banks.

NAMA appointed receivers to take control of 134 properties or companies between the end of March and the end of April in relation to unpaid debts of €469m. While the original value of the enforced loans is close to €500m, NAMA itself values the same debts at just €148m.

In the same period the agency was involved in six legal disputes before the courts, including the high-profile row with Treasury Holdings owners Johnny Ronan and Richard Barrett over their acquisition of shares in a Chinese business from Treasury, and a number of cases taken to secure judgement orders.

Irish Independent

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