No, not another one but this week, after several months of telling us there was no merit to a merger between the two, the Minister for Finance has finally come out and said it
“Government took the view that it made little sense at this point to retain two State organisations performing broadly similar functions and that, in the interests of costs and efficiency, it was appropriate for NAMA to purchase the assets of IBRC”
This blogpost reminds us of the Minister’s statements on a merger between IBRC and NAMA since September 2012. In summary, this is the timeline of the past six months and the abrupt U-turn by the Minister last week.
August 2012 – this blog examines IBRC and NAMA’s business and operating costs and recommends a merger
September 2012 – Minister Noonan says “NAMA and IBRC are actively engaged in reducing their respective portfolio of debts and debtors. They are not in direct competition with each other for customers and resources. The board of NAMA and the IBRC actively monitor all cost headings and are driving efficiencies and substantial savings through their procurement processes. Due to funding and operational considerations it is not considered appropriate to merge the two agencies at this time.”
October 2012 – CEO of IBRC Mike Aynsley confirms that there is competition for staff amongst state banking sector including NAMA. Minister Noonan again claims “They are not in direct competition with each other for customers and resources.” It later transpires that NAMA has recruited 14 staff to date from IBRC.
December 2012 – Minister Noonan fields a lengthy series of questions on the similarity between NAMA and IBRC and the competition between the two before concluding “I would not characterise the level of competition for resources between IBRC and NAMA as anything other than normal market competition”
And then this week, this is what Minister Noonan said in the Dail in response to a parliamentary question from the Sinn Fein finance spokesperson Pearse Doherty (emphasis added)
Deputy Pearse Doherty: To ask the Minister for Finance further to the announcement by the National Asset Management Agency on 7 February 2013, if he will provide an assessment of the merit in directing NAMA to acquire all legacy loans at the Irish Bank Resolution Corporation today..
Minister for Finance, Michael Noonan : The recent enactment of the IBRC Act 2013 together with the replacement of the Promissory Notes with a portfolio of Irish Government Bonds puts in place a permanent, finite and viable solution in terms of a significant portion of the shortfall in banking financing that has emerged through the Irish financial crisis. Following an independent valuation process, the Special Liquidators will sell the assets of IBRC (which are subject to a floating charge which secures IBRC debt to the Central Bank which will be sold to NAMA) to third parties at or above their independent valuation and failing that the Special Liquidators will sell the assets to NAMA at their valuation price.
The measure has the further advantage of achieving efficiencies by housing all legacy assets in one vehicle. Government took the view that it made little sense at this point to retain two State organisations performing broadly similar functions and that, in the interests of costs and efficiency, it was appropriate for NAMA to purchase the assets of IBRC
In fairness, he was hardly going to say ‘Yeah your right Pearse, we’re working on the legislation to dissolve IBRC and suspend property rights, we plan on shoe-horsing it through the Dail once we get the nod/wink from the ECB’
We’re dealing with an idiot in idiot’s clothing here. The whole thing looked like “jobs for the boys” to me.
Given Mr. Noonan’s newfound appreciation for cost efficiency, should we anticipate PTSB awarding NAMA mandates to manage: i) the €2 billion commercial mortgage book; ii) its Irish tracker mortgage portfolio; and iii) the UK mortgage portfolio?