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Archive for May 31st, 2012

(The new properties added in April 2012, click to enlarge)

NAMA has today published its now regular monthly list of properties subjected to foreclosure action – the list shows NAMA foreclosed properties at the end of March 2012. The full list is here, the list of new properties added is here, and you will find previous editions of the monthly list which was first launched in July 2011, here. It is hoped to have the list in a spreadsheet format shortly, available here.

 

You should read the full list of NAMA’s terms for accessing the lists here. But in summary, this is what you’re looking at:

(1) Real estate property subject to loans in NAMA to which receivers have been appointed. The receiver’s website is shown against each property.

(2) This is all the real estate foreclosed sorted by country, and then region.

(3) Not all of the property may be for sale.

(4) Contact the receiver with enquiries or expressions of interest in the first instance. Only pester NAMA if you’re not getting any response from the receiver and make allowances for receivers being busy with queries, particularly after a new release of foreclosed property.

(5) If you think there are mistakes on the list, contact NAMA.

Comment and analysis here shortly.

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This morning, the Central Bank of Ireland (CBI) has released its monthly snapshot of the state of Irish banks focussing on deposits and lending. The data covers the period up to 30th April 2012 and shows that during the month of April 2012, deposits by ordinary households and businesses actually increased substantially at the so-called “covered” or State-supported banks – essentially the two pillar banks, Bank of Ireland and AIB, and also Permanent TSB. The increase of €3.7bn from €103.9bn in March 2012 to €107.6bn in April 2012 was the biggest monthly increase since before the bailout in November 2010. Deposits are now back at May 2011 levels which is indeed very positive but are still down €17bn from October 2010, the month before the IMF/EU bailout. Private sector deposits fell at covered banks in the past 12 months by €0.6bn from €108.2bn to €107.6bn, but most of that fall took place in May/June 2011 when the intensifying Greek crisis undermined confidence across the PIIGS countres. After four months of modest rises and with a €1.2bn increase in March 2012 and €3.7bn in April 2012, I think it is fair to say there are tentative signs of stabilisation and growth. The CBI commentary on the figures is here and the main source for the increase is “repurchase agreements” at “Other Financial Intermediaries”.

The CBI doesn’t provide an analysis of deposits at the covered banks – about the only analysis it doesn’t provide – but in terms of all banks operating in Ireland including foreign and IFSC banks, Irish household deposits decreased by €83m in April, which brings such deposits to €92.0bn, the same as the June 2011 level. Total deposits from all sources in all Irish banks fell €5bn in April, mostly as a result of a decline of €6bn by Monetary Financial Institutions (MFIs, see below).

This morning has also seen the publication of the fourth “Deposits trends” note by the Department of Finance which confirms what the CBI is saying, and it shows retail deposits at the covered banks increasing by €2bn in April 2012 and such deposits now stand at €151bn. These figures include deposits at overseas operations of Irish banks eg the Bank of Ireland/Post Office joint venture in the UK. However the Department does say that one half of the increase in the month is from deposits at Irish branches. So again, the bouquet is positive, and should be welcomed as good news.

Here is the full set of deposit statistics for the different categories of bank operating in Ireland.

First up is the consolidated picture for all banks operating in Ireland including those 450-banks based in the IFSC which do not service the domestic economy.

Next up are the 20 banks which do service the domestic economy and include local subsidiaries of foreign banks like Danske, KBC and Rabobank. There is a list of all banks operating in Ireland here together with a note of the 20 that service the domestic economy.

And lastly the six State-guaranteed or “covered” financial institutions (AIB, Anglo, Bank of Ireland, EBS, Irish Life and Permanent and INBS – Anglo and INBS have now been merged to form the Irish Banking Resolution Corporation, IBRC)

(1) Monetary Financial Institutions (MFIs) refers to credit institutions, as defined in Community Law, money market funds, and other resident financial institutions whose business is to receive deposits and/or close substitutes for deposits from entities other than MFIs, and, for their own account (at least in economic terms), to grant credits and/or to make investments in securities. Since January 2009, credit institutions include Credit Unions as regulated by the Registrar of Credit Unions. Under ESA 95, the Eurosystem (including the Central Bank ofIreland) and other non-euro area national central banks are included in the MFI institutional sector. In the tables presented here, however, central banks are not included in the loans and deposits series with respect to MFI counterparties.

(2) NR Euro are Non-Resident European depositors

(3) NR Row are Non-Resident Rest of World depositors (ie outside Europe)

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A judgment in Dublin’s High Court which was delivered on 29th March 2012 but only published yesterday throws detailed light on the financial affairs of Limerick solicitors (and developers) Paul O’Brien and Denis McMahon.

The case itself is of peripheral interest, it involves companies in which Paul O’Brien – pictured here with former taoiseach Brian Cowen – was formally a principal and these companies were suing three individuals over a property deal in Clonmel. The Paul O’Brien companies, Greenband Investments and Mount Kennett Investment Company had receivers appointed by NAMA earlier this year.MountKennett and Greenband are both said to face liquidation, “an event said to [be] highly likely” according to the judgment.

Both companies had originally been represented by Limerick law firm, McMahon O’Brien in which Paul O’Brien and Denis McMahon were partners, and the case is noteworthy for awarding costs to the law firm so that Messrs O’Brien and McMahon might financially benefit from the judgement though it is left open to NAMA to seek to recover anything paid to that law firm.

The judge seems to criticise a Paul O’Brien-related company for not making clear during the course of proceedings that the company had in fact sold its interest in a property, a matter which the judge seems to feel to have been significant.

The judge also seems to criticise NAMA’s receivers for pursuing a matter which might not make economic sense, though the judge acknowledges that timing issues might have been at play to offset the warranting of such criticism.

An affidavit placed before the court by the NAMA receivers indicates that Paul O’Brien owes NAMA €287,778,118 and has assets worth only €86,991,591 indicating that he is in negative equity to the tune of €200m. And that Denis McMahon owes NAMA €35,500,499 and has assets of €21,692,000 indicating negative equity of €14m. Together both men owe NAMA €323,278,617.

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The Nationwide Building Society has this morning published its UK House Price data for May 2012. The Nationwide tends to be the first of the two UK building societies (the other being the Halifax) to produce house price data each month, it is one of the information sources referenced by NAMA’s Long Term Economic Value Regulation and is the source for the UK Residential key market data at the top of this page.

The Nationwide says that the average price of a UK home is now GBP £166,022 (compared with GBP £164,314 in April 2012 and GBP £162,764 at the end of November 2009 – 30th November, 2009 is the Valuation date chosen by NAMA by reference to which it values the Current Market Values of assets underpinning NAMA loans). Prices in the UK are now 10.8% off the peak of GBP £186,044 in October 2007. Interestingly the average house price at the end of March 2012 being GBP £166,022 (or €207,378 at GBP 1 = EUR 1.25) is 32% above the €157,360 implied by applying the CSO April 2012 index to the PTSB/ESRI peak prices in Ireland. The average home in Northern Ireland in Q1, 2012 was worth €168,347, according to the University of Ulster/Bank of Ireland survey.

With the latest release from Nationwide, UK house prices have risen 2.0% since 30th November, 2009, the date chosen by NAMA pursuant to the section 73 of the NAMA Act by reference to which Current Market Values of assets are valued. The NWL Index is now at 817 (because only an estimated 20% of NAMA property in the UK is residential and only 29% of NAMA’s property overall is in the UK, small changes in UK residential have a negligible impact on the index) meaning that average prices of NAMA property must increase by a weighted average of 22.3% for NAMA to breakeven on a gross basis.

According to the UK’s Office for Budget Responsibility which independently monitors and comments on the UK economy, house prices are projected to fall by 0.4% in 2012 before increasing by 0.1% in 2013, 2.5% in 2014 and 4.5% in 2015 and 4.5% also in 2016.  UK inflation remains elevated at an annualized 3.5% in March 2012, and is set to be close to 3% in 2012 – remember that UK inflation has increased by over 15% since their peak whereas in Ireland inflation has been subdued and is one third of that – the UK has pumped GBP0.3tn of “quantitative easing” into its GBP1.5tn economy. UK interest rates may increase later this year to combat inflation – the base rate has been 0.5% since February 2009.The UK economy is projected to grow by an anaemic 0.8% in 2012 in real terms, close to our own Department of Finance’s projection for Ireland at 0.7%.

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