It’s enough to make you want to go home and put the duvet over your head. Alan Dukes, Anglo’s chairman since June this year is reported by RTE to have today called for another NAMA to be set up to act as a receptacle for banks’ remaining distressed loans once NAMA has concluded its work. The five NAMA Participating Institutions will still have some €70bn of commercial property lending (including some land and development, eg sub-€20m at AIB,BoI, sub-€5m at Anglo), a significant proportion of which will be impaired. Alan wants these impaired loans transferred to a new NAMA organisation.
It is gobsmackingly incredible that focus is now turning to the non-NAMA loans. It is bewildering that these issues had not been considered in the context of Anglo at the start of September 2010 when the Minister for Finance Brian Lenihan announced the Asset Recovery Bank and Funding Bank split (and by the way, reports this morning indicate that nearly eight weeks after that ministerial announcement, the new Anglo plan (that’s version 3.0 after v1.0 was ridiculed and v2.0 never even made it to a formal decision by the EU) still hasn’t been prepared - according to the Independent this morning “the Government and the bank are currently working on a plan to submit to the EU Commission and Finance Minister Brian Lenihan claims it is likely to get the support of the commission”)
The subject of the PIs’ residual loans has been the subject of several entries on here (examples here and here). Calls to have NAMA absorb these residual loans have been dismissed as being an “unnecessary distraction”.
UPDATE: 29th October, 2010. Simon Carswell in the Irish Times today claims that Alan Dukes confirmed to reporters outside his formal presentation to the Leinster Society of Chartered Accountants Ireland that a plan has in fact been sent to the European Commission – “the bank had sent the European Commission the revised Government plan for the creation of the funding and asset recovery banks out of Anglo, he [Alan Dukes] said” This is at odds with the Independent report yesterday morning (see above) – perhaps the plan was sent sometime yesterday afternoon!It seems to me having read Simon’s article that Alan Dukes is not exactly settled on the Asset Recovery Bank and Funding Bank split and that he is still clinging to some future for Anglo, possibly as a capitalised receptacle of other distressed loans but with some new lending capability. That Alan Dukes is recognising the scale of problems with non-NAMA loans (and I estimate these non-residential mortgage property loans to be €70bn+ and that includes the €6.6bn of €5-20m land and development loans that will not remain with AIB and BoI following the Minister’s decision to increase the threshold for those two banks only) is to be welcomed, although it is bizarre that it is only happening at this late stage. But that there seems to be uncertainty about Anglo’s future shows a lack of planning.