National Asset Management Agency

The National Asset Management Agency (NAMA) was formally established in December 2009 as one of a number of initiatives taken by the Government to address the serious crisis in Irish banking which had developed as a result of excessive lending to the property sector, particularly during the years 2003 to 2007. It acquired certain loan assets (land and development and associated loans) in exchange for Government-guaranteed securities issued by it directly to five participating institutions, namely, Allied Irish Banks, Anglo Irish Bank, Bank of Ireland, Irish Nationwide Building Society and EBS Building Society.⁹

NAMA’s commercial objective, under Section 10 of the NAMA Act, is to obtain, in so far as possible, the best achievable financial return for the State having regard to the cost to the Exchequer of acquiring and dealing with bank assets, NAMA’s cost of capital and other costs.

NAMA operates as an independent commercial entity with its own board appointed by the Minister for Finance and including, ex officio, the Chief Executive of the NTMA and the Chief Executive of NAMA. All of NAMA’s staff are employees of the NTMA and are assigned to NAMA by the NTMA.

NAMA is required to submit an annual report and accounts to the Minister for Finance. These are published separately. NAMA also submits quarterly financial reports to the Minister, which are laid before each House of the Oireachtas. Its Chairman and Chief Executive attend and give evidence, whenever requested, to the Public Accounts Committee, the Joint Committee on Finance, Public Expenditure and Reform and other relevant Oireachtas committees.

 ⁹ Anglo Irish Bank and Irish Nationwide Building Society were merged in July 2011 and renamed Irish Bank Resolution Corporation Limited (IBRC) in October 2011. Special Liquidators were appointed to IBRC in February 2013. EBS Building Society was acquired by Allied Irish Banks in July 2011. 

Progress to Date

The first phase of NAMA’s work involved the valuation and transfer of land and development and associated loans with a nominal value of €74.2 billon. In purchasing these loans, NAMA issued senior and sub-ordinated debt of €31.8 billion, representing a significant injection of liquidity at a critical time in the restructuring of the Irish banking system.

NAMA has made significant progress by reference to the primary commercial mandate that the legislature set for it, namely achieving the best financial return for the State from its acquired loans and the assets securing them. This progress is evident in the profits and the cash flows that NAMA is generating. For the third year in succession, despite a prudent impairment policy, NAMA reported a profit, after tax and impairment, of more than €200 million in 2013. It also reported continuing strong cash flows. From inception to end-2013 NAMA had generated €15.1 billion in debtor receipts (asset disposals and non-disposal receipts).

Its strong cash performance enabled NAMA to meet its first debt repayment milestone – the repayment of €7.5 billion or 25 per cent of its senior debt by end-2013. Meeting this target was an important element in the progress that Ireland is making in reducing the State’s contingent liabilities and it was a contributory factor in enabling Ireland to exit the EU/IMF programme at end-2013.

NAMA has generated cash primarily through the disposal of property and other assets held by its debtors and receivers and the disposal of its loans. From inception to end-2013 NAMA generated €10.9 billion in disposal receipts. Approximately 68 per cent of those sales related to assets in Britain, particularly in London, reflecting the continued strength of that market since 2009. In Ireland the significant recovery in the property market since mid-2013 has enabled NAMA to increase the flow of assets for sale, including a number of sizeable loan and property portfolios that have attracted interest from large institutional buyers.

NAMA also provides funding to enhance the value of assets under the control of its debtors and receivers.

By end-2013 it had approved over €1 billion in development funding for projects in Ireland. Over €600 million of this has already been drawn down. NAMA is committed to advancing total development funding of €2.5 billion for Irish projects over the period to end-2016.

NAMA also seeks to make a wider contribution in the Irish economy. This includes directly supporting 15,000 jobs in Ireland in trading businesses linked to its loans; its work with the IDA in identifying suitable commercial properties to meet the requirements of foreign direct investment; and its support of small and medium businesses in the retail sector through its rent abatement initiative. NAMA is also engaging proactively with Government Departments and other public bodies in relation to their possible need for land or properties. In this way, NAMA has identified over 4,600 residential properties as being available and potentially suitable for social housing provision.

NTMA Services to NAMA

Under Section 41 of the NAMA Act, the NTMA provides NAMA with business and support services, including HR, IT, market risk, transaction processing and treasury services. NAMA reimburses to the NTMA the cost of these services which was €41 million (including staff costs) in 2013. By the end of 2013, the NTMA had assigned to NAMA 331 staff with extensive experience and expertise in the areas of lending, property, accountancy, law, banking and credit.