Irish asset management company to yield €4bn for exchequer

28 Jul 20

The asset management company Ireland created in response to the global financial crisis more than a decade ago is expected to return €4bn to the government over its lifetime.

 

The National Asset Management Agency was set up in 2009 to acquire property-related loans from commercial banks, to hold and manage those loans and the related collateral (mainly property), and ultimately dispose of all the assets “in a manner that protects the state’s interests”.

Ireland’s national audit office has completed its three-yearly review into the company’s work, covering the period until the end of 2018, revealing the current state of the company’s assets and performance.

NAMA paid €31.8bn to the banks for the loans it acquired in 2010 and 2011, representing a 57% discount on the loans’ par value of €74.4bn.

One of NAMA’s key objectives was to redeem the debt issued for the loans by 2020, which it achieved in October 2017, and it was significantly ahead of its repayment schedule by 2014.

It also covered its costs without needing further borrowing, and at the end of 2018 reported total retained earnings of €4.2bn – further reporting at the end of 2019 that it expected to return a €4bn surplus to the exchequer upon the completion of its work.

It has paid €2bn in the past year and, according to its annual report, delivered at the beginning of July, it expects to pay the rest over the next two years.

Upon publication of the annual report, finance minister Paschal Donohoe said the repayment would go towards the government’s response to Covid-19 and reduce the requirement for borrowing.

The audit office also noted that since 2014 NAMA has directly funded the construction of 11,860 homes on land it had a stake in, including thousands of social homes.

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