Someone should enlighten NAMA about so-called SMART objectives, with SMART standing for Specific, Measurable, Achievable, Realistic and Time-specified. Then we might get something less wishy-washy than the objectives for the Agency published this afternoon – available here. This summarises the main points
“Ensuring the implementation of schedules for asset sales that have been agreed with debtors.
Optimising cashflow to NAMA from loans and debtors with a view to paying down 25% of the Agency’s debts (€7.5 bn) by end 2013.
Adopting an active strategy and establishing a panel for selling loans.
Establishing mechanisms to attract international investor capital, such as Qualifying Investor Funds (QIFs).
Development of the Deferred Mortgage initiative for residential properties.
Rollout of vendor finance on the commercial property portfolio.”
It is heavily process-focussed which is typical of the Irish civil service, rather than objective-focussed. Okay the Agency says that it will “optimise” – in other words, “try its best to achieve” – cashflow so as to pay down 25% of Agency debt by the end of 2013. This is a self-imposed target and although the document makes reference to quarterly oversight by the bailout troika and even though NAMA chairman, Frank Daly has previously talked about the target being “copper-fastened” into agreements with the Troika, NAMA has not been able to point to specific wording in any agreement to support that claim. So to restate that objective – “NAMA will do its best working with loans and debtors in order to achieve a self-imposed and flexible target next year” As for 2012’s contribution to that target, who knows.
The “development of the deferred mortgage initiative” has been in the pipeline for at least eight months and the current position is the “initiative” is expected in the next month, NAMA has appointed a project team, but reading today’s report, the matter may lie in the hands of the European Commission to approve in competition terms.
“Rollout of vendor finance on the commercial property portfolio”, otherwise called staple financing was actually achieved in September 2011 when NAMA offered One Warrington Place for sale with upto 70% “staple financing” available. In the event, the buyer Prudential, didn’t opt for staple financing – perhaps it felt the 2.5% markup NAMA is making on its staple financing loans is excessive. But here you have NAMA stating an objective which was achieved four months ago!
And many of the objectives are outside the Agency’s control eg getting approval from the European Commission to a mortgage initiative about which there are serious competition concerns.
So no profit target, no cashflow target for 2012, no numbers for approval of business plans and a bunch of woolly unspecific, process-focussed, time-unknown objectives – “we’ll try our best”.