We certainly get a lot of bang for our 150,000 bucks that is paid to the NAMA chairman, the hawkish Frank Daly. He has elevated the promotion and defence of NAMA into an art form and gave an interview on a Dublin radio station yesterday. The Broadsheet.ie has painstakingly transcribed the interview, and the transcript is available here.
There’s not really anything that the regular audience on here won’t have known before – NAMA has so far had €350m of asset transfers reversed/additional security provided, by developers. NAMA still isn’t saying if any of this is dependent on NAMA cooperating with, or advancing new funding to, developers. At least Frank is no longer equating these reversals and additional security with NAMA’s operating costs over ten years, costs which will total €194m in 2012 alone according to NAMA’s latest projections.
Frank might want to expand his vocabulary to describe lending practices at Irish banks to give some variety to his use of “appalling”.
The only hook in the entire interview was when Frank said “and by the way being declared bankrupt in the UK does not mean NAMA loses interest in you -far from it” You’ll recall that NAMA is still pursuing John Fleming who was discharged from bankruptcy last November and is presently in the UK courts trying to get an attachment order against John’s income for the next three years. Tom McFeely and the Grehan brothers, Ray and Danny have also declared themselves bankrupt in the UK.
And Frank wasn’t being exactly frank when he referred to a developer managing a portfolio worth €2bn in the context of being paid a “six figure salary”. Remember NAMA is paying €55m in overheads to 41 developers. And NAMA has yet to receive European Commission approval for its valuation and due diligence in the acquisition of €47bn of the overall total of €74bn of NAMA loan acquisitions.
But all said, a fine defence of NAMA again from Frank though at this stage he could probably do it in his sleep.
NAMA Wine Lake 
Give it a rest Frank,it’s RE not rocket science nor are you saving life’s,did someone steal your holy communion money or something.Persecuting and pursuing broke BK developers is ludicrous,waste of taxpayers money,small minded,vengeful and a failed flawed strategy.Sell a few assets like you are supposed to,add some value,instead you allow and advocate the transfer of 3.1 Billion to an insolvent broke borrower on the promise of future funding.You no longer have any moral authority.Best in the business what nonsense,complete utter rubbish,polluting the airwaves with your ridiculous outdated failed strategy.Step aside,you would not even make the second team,after the debacle over the 3.1 Billion,well Frank got an explanation for us?
Daly: “No, no. When we go out there to sell the assets on behalf of the Irish people, we’re going to be up against the best in the business. And there’s no point really in NAMA putting out a second team. I mean, I, you know, where will we get people with property expertise, with financial expertise, with banking expertise? You have to get them from the sectors where they develop their skills.”
“But all said, a fine defence of NAMA again from Frank though at this stage he could probably do it in his sleep.”
The rest of us could probably sleep while he does it.
A few personal highlights of the interview –
a) Was it the jeweller Gerard Ratner that infamously called his merchandise “crap”? Frank is not a million miles behind in describing his wares in the interview as “dross” and in another place “rubbish”. Not there’s a strategy to maximise recovery for the taxpayer!
b) See the comment – “our task for some time has been to actually manage those assets, manage the loans, manage the collateral behind them.” Frank is now admitting that NAMA is there to “manage the collateral behind” the loans. No surprise there I suppose but I wonder how long before creditors and their lawyers start looking very carefully at that statement in cases where there has not been a receiver appointed. Murky waters.
c) When Matt says “Whereas NAMA took two years to transfer all the loans……” Frank says “And, OK, it didn’t quite take us two years, or anything like that, because remember NAMA only started this process in March of 2010…” Sorry, NAMA only started the process of acquisition in March of 2010??? Well that impression is just not true. There was 6-9 months of work before March 2010 to acquire Tranche 1. If I recall the NAMA bosses were trumpting at the time how much work they were doing to get to a Tranche 1 transfer. What Frank is now trying to avoid is the fact that NAMA has been effectively on the road now for 3 years (not 2). And loan acquisition is still not finished.
d) Frank says “We have already managed to get either charges or actual reversal of asset transfers to the tune of about €350million from some of our debtors…..” This seems a large leap from the position in from barely 2 months ago (February 2012) when Minister for Finance Michael Noonan told the Fianna Fail finance spokesman Michael McGrath in the Dail that NAMA had succeeded in reversing €160m of transfers. As already pointed out in an earlier NWL article, this was only an additional €30m when compared with the figures announced in December 2010. So in light of the disappointing coverage, it appears the goalposts have been relocated. It now appears to include the concept of “charges”. That’s a very difficult one to measure in terms of apples and oranges. Charges can be given for good commercial reasons and also in return for something (like new money advanced?). There is no hint of impropriety in giving a new charge. Frank talks about it in the context of “going after all of the assets and tackling the lifestyles of the debtors”. Interestingly, despite the definition being significantly expanded (quite advantageously) the eventual goal is still the same. €500 million under this heading. As you say, at least he has the good sense of stopping this nonsense that it will pay for 10 years of costs.
e) Most disappointing was the lack of incisive questioning from Matt Cooper. He’s usually a good ‘big picture’ type of guy. This was an easy ride. Ask about the stuff that other journos are fixated on. Avoid the real questions – the evidence to date on losses and property values; whether NAMA will need another bailout from the taxpayer to recapitalise itself; Frank’s thinking in allowing €3.1bn of NAMA’s money to be given to the ECB last weekend in cash to pay for the Anglo prom note instalment (and not even issue a statement?). Sounds like too much hard work for Matt to get knowledgeable on all that. Much easier to ask what is Frank doing to punish developers and bankers. That’s what the punters want to hear. Not what’s going to hurt their pocket down the line. Well done Matt!
@Capoliman, Congratulations – excellent post and analysis, or as Watson might say “Well spotted, Sherlock!”
Terrible interview from Mr Cooper,thought he would have been more direct with his questions to Frank.Thought frank handled NAMA defence well although well played out by now.
A few relevant questions on NAMA sales strategy in Ireland for the next gobsh*te hack that interviews Frank:
1) How do you sell this many assets in a depressed market when you are mandated to obtain the highest possible price?
2) What sales strategy are you going to use in to sell the €20 billion of NAMA assets in Ireland – as you can’t use the same marketing strategies that appeared to work for you when you sold the £5 billion in assets in London.
3) Would you consider selling using in-house staff, or will you continue to hire outside agents and auctioneers with unmanageable nefarious exposure and consequences?
4) Have you considered opening “in-house” sales offices around the country?
5) If you sell the underlying asset, do you sell with any warranties, or do you sell as-is?
6) Which sales method do you believe will work best or have you thought about that yet?
7) If you intend to sell the underlying property asset, which is your preferred method of disposal – through brokers, sealed bids, or auctions?
8) Why don’t you offer seller financing generally? Why will it be limited to a few headline seeking asset sales?
9) When you sell loans, will your preference be to use bulk sales, securitisations, or equity partnerships?
10) How do you level the playing field so as to give equal opportunities to small investors and large investors – and why have you excluded small investors from purchasing shares in NAMA’s proposed QIFs?
11) How are you currently valuing your portfolio? Do you estimate projected collections or is it still based on the initial NAMA purchase price?
12) Have you an affordable housing program? Or if not, why not? – and are you under any political pressure to provide one?
13) How do you explain the fact that the government took €3 billion out of your kitty and you didn’t even utter a “peep”?
14) What will you say when some smart investor receives a great deal from the not-so-smart Agency? How will you excuse the situation to the taxpayer when you sell a package of loans for 70 cent on the euro, only to later find out that your vulture capitalist buyer repackaged and sold the same loans for 90 cents on the euro? Or put another way, how will you feel when the country reads daily, and in detail, of the huge profits the vulture capitalists will receive when they buy assets you are responsible for selling?
18) Will you tell the public that often trial and error will dictate the evolution of the sales methods that will be used by NAMA to sell assets?
…. that’s enough, I’m getting depressed.
@wstt
Maybe another point is (19):
Who will actually pay back the 3 billion, what twists and turns can happen in one year, could that 3 billion be nice bait for a generous eastern alliance?
It’s a lot of money, and I don’t care who borrowed it, getting it back is never a done deal and it will be another negotiation done under duress. My guess is enter China stage left, Ireland on its knees, PN deal part two having been rejected by EU. A mess NAMA should never be embroiled in in the first place.
@WSTT, thank you for questions which get under the bonnet at NAMA, and questions which at this stage, you would expect NAMA to be able to answer, and publicly answer at that – it’s hardly showing your hand of cards if you set out your basic aims and intentions. A NAMA estate agency in Cork, Limerick, Galway and Dublin perhaps? What innovative thinking! Sadly, I cannot think of one presenter on Irish TV or radio that would be able to handle these questions at this level of detail and be able to deal with follow-ups. You’d expect a couple of print journalists to be able to interview NAMA along the lines above, though obviously to date that hasn’t happened.
@sf ca writer, Excellent point. “Ah, shure we only need it ’till next Monday and anyway the bank manager’s going to give me an overdraft….” Monday never comes!
@NWL,
NAMA’s brief is to sell loans and other assets to recoup as much money as possible. But it needs to minimise the impact of such transactions on local property markets and the domestic economy in general. To fulfill a social purpose, it should take the opportunity to maximize the availability and affordability of residential property for low and moderate income individuals and families.
It also needs to create a Small Investor Program to meet the needs of investors with moderate levels of investment capital and offer its property assets on an individual basis for a predetermined period, by way of negotiated sale, auction, or tender. Such properties should be marketed or offered with an emphasis on geographic focus to attract small local investors who want to invest in their local market.
For some strange reason, which is not shared with anyone else (and which makes no sense at all), it has turned its back on that option.
“Never give the little guy a break”…….