It will be next Thursday 26th July 2012 when NAMA will publish its annual report and audited accounts for 2011, and we’re all looking forward to that. Today, NAMA’s parent organisation, the National Treasury Management Agency (NTMA) published its own annual report for 2011. The NTMA has a range of functions but principal among them is management of the national debt, and most observers would say that it has been on cruise-control since the Troika bailout in November 2010 with permission slips needed from the EU, ECB and IMF if the country wants to even take a bathroom break. The NTMA however would have you believe that it has been a hotbed of activity in 2011, trying to convince Arabs, Sikhs and Jesus freaks to invest in Irish bonds as the country plots a return to the traditional bond markets in the next 18 months. How well the NTMA has made new friends remains to be seen
A separate annual report was published this morning for the National Pension Reserve Fund (NPRF) which was originally intended to provide a temporary rainy day fund until it would be deployed in the third decade of this century to fund pensions. As it happens, the NPRF was raided to bail-out two of the banks, AIB and Bank of Ireland, and there will be intensive focus on the NPRF in coming months as Ireland is expected to try to get the European bailout fund, the ESM, to buy our stakes in these two banks. Despite pumping €25bn into both banks, the NPRF is valuing those stakes at €8bn today (see table below). I have just ploughed through over 200 pages in the two annual reports, and can say that the only detail is that the NPRF engaged Goodbody Corporate Finance to value the stakes and the NPRF used the “advice” of Goodbody to arrive at its own valuation. There is absolutely NO DETAIL WHATSOEVER on how Goodbody valued the preference shares in AIB and Bank of Ireland which comprises 90% of the €8bn valuation shown in the accounts – Note 10 in the NPRF’s accounts on PDF page 60 details the history of the AIB/BofI shareholdings. Yet there are scores of pages given over to the most mundane trivia.
Another sinister omission is any detail of the rocketing legal and consultancy fees incurred by the NTMA of €36m in 2011, and there is reference to a €14m legal settlement without more detail being provided.
For the NAMA audience, we learn the Agency now has 214 employees, that NAMA’s John Mulcahy is advising the NPRF on its property investments, the NPRF has €507m of property investments and last year they returned 9%. A measly €51m of property investment is in Ireland. Remember Northwood may be earning 20% per annum on its first Irish property purchase at One Warrington Place, yet the NPRF seems to be giving Irish property a wide berth. If NAMA is so confident in the “stabilisation” of Irish property, how come its John Mulcahy is not able to steer the NPRF’s investments towards domestic shores?
It’s like poking a caged, starved mutt with a stick, but since we’re three days before the Sunday Independent can serve up another smorgasbord of rage-inducing fare, I’ll leave you with the NTMA CEO’s rewards for last year – €490,000 basic plus nearly €29,000 for car and health. And his pension? Who knows, all the accounts say is “The Chief Executive’s pension entitlements are within the standard entitlements in the model public sector defined benefit superannuation scheme” ! John did waive any bonus that might have been payable in 2011 and his deal provides for a bonus of up to 80% of salary, and it should be said that John has agreed to waive 15% of his salary for one year in 2012.