Sunday 17 December 2017

'Overloaded' agency couldn't take non-property loans

Emmet Oliver

The IMF shied away from the idea of putting non-property loans into NAMA because of concerns it might "overload'' the agency, it has emerged.

The IMF Ireland mission held meetings with NAMA last week to discuss downsizing the Irish banks and it is understood NAMA executives were prepared to take on additional loan books. But the agency is facing a major challenge just dealing with the €80bn of land and development loans it is already managing.

In an interview this week with the Irish Independent, Ajai Chopra, head of the Ireland IMF mission, said there was a danger of overloading NAMA at this time. He said, however, the threshold of €20m that NAMA uses for property loans would be reversed.

That is likely to significantly increase NAMA's workload, although it will cut the work for the banks, which were planning to manage these smaller loans via the NAMA and credit control units.

Any increase in NAMA's reach to take other loans -- like SME or mortgage loans -- would involve a huge increase in its staffing and funding needs, say sources.

Since January 2009, NAMA has recruited 75 staff and expects to have about 100 by the end of this year.

It also uses the services of a large number of legal, accountancy and insolvency firms, sometimes paying out controversial levels of fees. One of the agency's biggest challenges is assessing the business plans of individual developers.

Running an organisation with internal staff and outsourced staff is one of the biggest challenges for NAMA, said recent report on the agency.

The Comptroller and Auditor General (C&AG) said: "A major risk to be managed . . . relates to its capacity to manage a very large set of services bought from private providers, while at the same time integrating recruited personnel into a cohesive streamlined operation.''

The C&AG is now reviewing how NAMA valued the loans it bought from the banks.

Irish Independent

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