NAMA has this morning published its report and accounts for the three months ending 30th September 2012. These documents were provided to the Minister for Finance, Michael Noonan on 14th December 2012 who has approved the documents for publication. The report is here. The accounts are here.
Here are the highlights:
(1) A profit before impairment of €141m was generated in Q3,2012. Previously, NAMA has reported profits after impairment of €222m for H1,2012. NAMA now calculates “impairments” twice yearly, and such impairments in part reflect the deterioration in the values of property underpinning NAMA loans. The profit is slightly down on previous quarters.
(2) Performing loans by reference to original book value have declined from 19% in Q2,2012 to just 17% in Q3,2012. Remember these will include some restructured loans, so by reference to the original loan agreements, the 17% is likely to be closer to 13%. The original NAMA business plan anticipated 40% performing loans. 75% of the non-performing loans are classified as “delinquent” with default of over 120 days.
(3) NAMA has now taken enforcement action on a staggering €10bn of its €74bn loans, including 319 individual loans worth €1.452bn in Q3,2012 alone where receivers were appointed at NAMA’s behest.
(4) We get a little detail on four of the legal cases initiated in Q3,2012 including the reliefs sought. It is interesting that in the case against Flynns and O’Reillys, NAMA was merely seeking the rectification of a mortgage and charge.
(5) NAMA’s expenses are in line with previous quarters, the biggies are staff costs of €7m, payment to AIB, Bank of Ireland and IBRC to manage NAMA loans of €14m,
(6) Legal fees were just €695,000 in Q3 but we found out recently that NAMA is hiding most of its legal fees by capitalizing them in the balance sheet and claiming them back from developers, even developers whose loans are totally under water.
(7) A new-ish trend is emerging whereby NAMA claims it must place cash on deposit with the NTMA – €1.15bn at end of Q3, compared with €0.85m at end Q2, to cover derivative exposures. People generally glaze over at the mention of derivatives, but this deserves some scrutiny.
There will be an analysis by Profit and Loss and Balance sheet line here tomorrow, but in summary, NAMA continues to generate profits before impairment, as it should at this stage, and performing loans have deteriorated which confirms that NAMA will face great challenges as it continues to dispose of the better quality assets.
NAMA has already produced an end of year (2012) review here, and we can expect the full year unaudited accounts for 2012 in April/May 2013 and the audited accounts and annual report in July 2013.
The Q2,2012 report and accounts are examined here.