Looking through the written answers last Thursday in the Dail, we get what seems on here to be one of the clearest insights into the operation of NAMA. We learn:
(1) For all the bluster about NAMA’s billions of sales, the Agency had only booked €2.7bn to the end of September 2011
(2) Shockingly NAMA has made a profit of only €132m on these sales, and remember these sales were supposed to be of better quality assets in markets where prices had improved after November 2009
(3) We learn that although NAMA is prevented from selling property to defaulting developers, NAMA is allowed to sell property to its Qualified Investment Funds which can then sell that property to anyone, including defaulting developers.
(4) NAMA has not yet had EU approval on the acquisition of 2/3rds of its loans
(5) The Government is still claiming that any eventual NAMA losses will be recharged to the banks, pro-rataed to the original par value of loans acquired from those banks. So Anglo and INBS will be recharged 50% of any NAMA loss.
(6) Finally, FINALLY we have confirmation that NAMA does NOT have any debt reduction target by the end of 2013 enshrined in any Troika agreement. There are commitments for asset disposals, operational costs and governance but NOTHING about redeeming NAMA’s bonds
(7) NAMA is funding a GBP 20,000 (€24,000) piece of research on landbank and development issues inNorthern Irelandwith theUniversityofUlster
(8) NAMA hasn’t even made provision for what the media estimate will be €7m of legal costs relating to the Paddy McKillen court challenge which Paddy substantially won at the Supreme Court in early 2011
(9) NAMA has approved overheads of an average of €1.3m per developer or €55m for 41 developers. So much for NAMA and its €70-100,000 or €200,000 salaries.
@NWL. See what I mean about written answers. No fudge here!
1-Over a third of that subject to ongoing and expensive litigation,may get reversed “jury” out.
2-What’s profit in NAMAworld,over the buy in price?
3-Appears,to be preventing itself from selling anything,has fallen in love with the assets and the power.They are second tier,back office people,suddenly everyone wants a meeting,the prestige and power has blinded them.
5-Then B of I should has a contingent liability here,new owners will be thrilled.
6-Terrific plan,retire early historically low cost of funds,indicative of its failed strategy,embarrassing really that they are unable to successfully deploy this capital.
8-And climbing,daily.
9-What are “overheads” they receive property management and leasing fees,there is more!!
1.3m€ on average per ‘Developer’ and €3m in total for ‘work’ on the 29 NAMA ghost estates. NAMA carry-on is like that of a bloated entity in the wilderness with no natural enemies. This example of allocation of monies is a good indicator of how actions of NAMA are at odds with its mandate.
Well it appears what I said it was all along only much, much worse! Pity this summary was not available when Brendan was doing his media thing last week!
I knew it – NWL is actually Pearse Doherty’s blog!
“How much are the developers getting paid?” was always the wrong question. The developers were never paid individual salaries. They don’t think in terms of salaries. The right question was “How much is NAMA paying to the developers’ companies to manage the assets?” Within those companies were salaries to the staff, overheads, fees etc. and whatever was left was for the developer. Most developers are not interested in working for salaries. It’s not in their DNA.
To be fair to NAMA, it is not booking profit on its sales until the total sales income of any borrowers assets exceed the NAMA acquisition cost of all that borrowers loans. Or as Minister Noonan put it …. “where property collateral is disposed of, the proceeds are generally applied to reduce the outstanding loan balances and no profit is booked in the accounts in respect of the disposal of such collateral, except in cases where cash in excess of the total amount paid by NAMA for a borrower’s overall loans has been recovered.”
However, there is no mention of NAMA’s overheads or direct costs in calculating “profit” booked, so I assume that the profit of €132 million to September 2011 is gross i.e. before those costs – and obviously before any allowance for diminution of capital values.
I’ve got a very important question for WSTT. How did you get a tiger avatar for this blog? (smilie).
@GD, From Gravatar. :-)
@WSTT: I’m suitably impressed!
I don’t get it. I get that there was a multiplicity of reason why NAMA was established. But why so many goals.
Surely the entire point is to make money, not a little, a lot. But to do that, it quite simply cannot be the only seller or potential seller. It must control the market in a one off dump of 60-.70% of Irish assets forcing all the other to condense loss and find a floor once and for all. Not like they are playing the game now where they very size of their book is acting as a drogue to the whole market. Then there should be no reason whatsoever to sell the good stuff. And certainly there should be no reason to sell the foreign stuff. There NAMA is just another player and can go for best price, even if that takes years.
But this, this is just insane. And who really gives a shit who buys it. And anyway by the time this has shook itself out the UK bankruptcies will be cleared and the NAMA legislation will run into EU problems and probably Irish Constitutional problems.
why do the national press make more of this?they cant all be hoping to become press advisers! ! !