Nama queries Burton on her €15bn loss remark
THERE were raised eyebrows within the ranks of Nama last week following remarks by Social Protection Minister Joan Burton who suggested on RTE radio's Marian Finucane Show that the State agency could end up losing €15bn of the €31.8bn it paid to the banks for the €74bn of development loans on their books.
Commenting on the financial burden that had been placed on taxpayers as a consequence of the banks' collapse, Ms Burton said: "The bank debt that Irish citizens took on in total is roughly about €64bn, not counting by the way another €30bn that we've committed on Nama, at least half of which we'll get back.
"That €64bn went on our relatively slim shoulders as a country."
While Ms Burton's seeming reference to the possibility of Nama losing some €15bn more on its current loan book passed off without any questions from Marian Finucane and the show's other panellists, the Sunday Independent has learned that the minister's office was contacted by representatives from Nama the following day in an effort to clarify her statement.
It is understood that Nama became aware of the minister's comments after it was reported on the Namawinelake blog under the headline: "Senior minister lets slip that Nama faces a €15bn loss as finance minister refuses to include Nama in ongoing debt negotiations".
Commenting on the nature of the contact between Nama and Ms Burton's office, an informed source said: "A representative from Nama got on to the department to bring the online reporting of the minister's remarks to their attention.
"She informed them that she had been referring to the original €40bn discount that had been applied to the loans when Nama took them over from the banks. She wasn't referring to the €30bn or so that makes up Nama's current loan book."
A spokesman for Nama said the agency had merely brought the online reporting of Ms Burton's comments to the attention of her officials, adding that such contacts are routine between Nama and all government departments.
Contacted by the Sunday Independent for her views on the matter, Ms Burton said: "I was clearly talking about the total loss to the State and the taxpayer. I thought I made that clear. Nama was structured to break even at least. But because of the bank guarantee, one way or another, citizens took the hit."
While the Social Protection Minister's expression of confidence in Nama's ability to recover the €31.8bn it paid for the banks' development loans may be sufficient for the agency's officials, it may not be enough to address the concerns of taxpayers who will be forced to pick up the bill should it fail in its mission.
Indeed, the sheer magnitude of the challenge facing Nama in trying to recover even the amount it paid the banks -- let alone their loans' original face value of €74bn -- was admitted by Nama chairman Frank Daly in an address to the Dublin Chamber of Commerce at the Four Seasons Hotel only last February.
In the course of his speech, Mr Daly described the "burden" of recovering the €31.8bn Nama had paid the banks for their development loans as "a massive and onerous one".