The news that Ulster Bank was seeking proposals for the disposal of €1bn of loans-related property is sure to have unnerved portfolio managers at NAMA who are trying to get their heads around a strategy for the €9.25bn of commercial property loans – by reference to 30th November 2009 values, worth about €6-7bn today. With both residential and commercial prices still shaky here, the last thing the Agency needs is supply-side competition. Several Ulster Bank borrowers whose loans haven’t yet been foreclosed will also have been unnerved by the prospect – not officially communicated to them yet – of being strong-armed into selling property or accepting a transfer to new lenders.
And now it seems that the other main British bank operating here and which has also had its fingers (and hands,wrists and other extremities!) burned on Irish property lending, Bank of Scotland Ireland is, according to credible sources, understood to be assembling a €400m portfolio with the same objective in mind – dump and get out of Dodge as soon as possible. That’s possibly an exaggeration as BoSI has a work-out vehicle, Certus and in 2010 was understood to have some €30bn of lending outstanding inIreland, before it shut up shop for new business and went into work-out mode. But it does appear to be the case that a dimmer view is being taken of the prospects for the Irish residential and commercial sectors.
NAMA might have told the Dublin Chamber of Commerce that it expected commercial prices to stabilise in Ireland in 2012 but at the same time, it appears as if the Agency was confiding in the Troika that prices might not stabilise before the end of the bailout programme in December 2013. With the supply-side becoming a tad crowded, it seems as if the skinny given to the Troika may have been more accurate.
Bank of Scotland Ireland was asked for a comment on the claim that it is assembling a substantial portfolio for short term disposal. Should a response be received, it will be posted here.
