NAMA’s core operating costs set to increase by 50%

At NAMA’s appearance before the Committee of Public Accounts in November, 2010 the agency confirmed that its core annual operating costs “including rent for the floor and all other overheads” were in the region of €25m and that “probably” 70% of this total represented salary costs. Translating this into hard numbers would mean that less than 100 people cost the agency €17.5m. This headcount will include the NAMA CEO who is reportedly paid €500,000 and presumably the higher salaries of the senior appointments to NAMA in 2010. Subsequent information provided to the Committee showed that the National Treasury Management Agency, the umbrella agency which includes NAMA (and four other state agencies) had confirmed some salary scales (presumably at November 2010) as follows:
– 202 NTMA staff earn up to €100,000.
– 65 earn between €100,001 and €150,000.
– 22 earn between €150,001 and €200,000.
– 16 earn more than €200,000

News today from Laura Noonan at the Independent citing unnamed “sources” (New Year, same old method of operation) that NAMA is set to increase its headcount by 50 in the next four months. The reason? Apparently to cope with the volume of work now that NAMA is taking over all €0-5m exposures at AIB and Bank of Ireland. For those of you now following this closely, below is a summary of the history of NAMA’s self-determined exposure thresholds:

So if the 50 new recruits cost NAMA an average of €175,000 per annum that will push NAMA’s costs up from €25m to €33.75m. Presumably the 50 will need to be accommodated and provided with all the services currently provided to NAMA staff and if that is pro-rata in line with existing staff then the core costs will go to €37.5m per annum. These costs appear to exclude the costs of service providers such as third party lawyers and valuers.

The Independent reports that the 50 staff will occupy “specialist roles such as portfolio management and credit control”. NAMA of course will  be directly managing 175 of the 1,500 ++ developers with outstanding loans at par value of €50bn. In addition there will be staff at the five Participating Institutions managing smaller scale developers and Capita is providing “master loan provider” services in respect of these smaller exposures.

150 staff still looks remarkably little for the direct management of €50bn of assets at par value and overall management for the remaining €40bn micro-managed by the banks. And the view from here is that NAMA will need increase its staff further still if it is to avoid delays and potentially disastrous decisions that might see assets disposed of below value.

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