Nama banks on having €10bn in combined loans next year

The National Asset Management Agency has told the Minister for Finance that it expects to start 2016 with just 165 debtors and with combined loans owed to the agency of €10 billion.

This emerged in a statement provided to the Minister, Michael Noonan, outlining its objectives for next year. It is predicated on Nama closing the sale of Project Arrow, which involves 340 debtors and has par value loans of €7.2 billion.

The agency had 663 debtors at the beginning of this year, but various loan sales and refinancings by borrowers have seen that number reduce substantially.

This is all part of Nama’s wind-down in activities, with most of its work expected to be completed by the end of 2018.

To reflect this, staff numbers are expected to reduce to 125 by the end of 2016 from a peak of 370 at the beginning of this year.

Nama’s budget for total direct operating costs for 2016 is €115 million, compared with €141 million for this year.

The statement also details how Nama is working towards delivering some 41,000 housing units in the greater Dublin area in conjunction with debtors, receivers and local authorities.

Nama also published its latest accounts, which show that it made a profit of €473 million in the first half of this year. This compares with a profit of €458 million in the whole of 2014.

Nama said it generated total cash of €3.5 billion in the six- month period, with cash proceeds from property collateral and loan sales amounting to €3.2 billion. This brings to €29 billion the amount of cash generated to date.

€25m impairment

The half-year accounts record an impairment release of €25 million, compared with a charge of €57 million in the same period of 2014.

This was the first such release since Nama was set up in 2009 to take toxic property loans off the balance sheets of domestic Irish banks.

Nama said this was “further evidence” that its loan impairments remain on a “downward trajectory assuming current market conditions prevail”.

Its senior bond redemptions amounted to €2.75 billion in the first half, compared with €9.1 billion in all of last year.

The accounts note that another €1.75 billion was redeemed in the third quarter of this year, bring the total to €21.1 billion, or 70 per cent of total senior bonds it issued.

Nama expects to have redeemed €24 billion by the end of 2016.

The carrying value of Nama’s loan portfolio at the end of June, net of accumulated impairment provisions of €3.5 billion, was €11.3 billion, down from €12.5 billion at the end of March.

€20m staff costs

Nama’s administration costs amounted to €55 million in the first six months of the year. Staff costs came to €20.3 million, while overheads and shared service costs were €5.4 million. These sums are reimbursed to the

National Treasury Management Agency

.

Nama’s legal fees in the period amounted to just under €2.5 million. Primary and master servicer fees amounted to €20.6 million.

The agency’s operating costs since inception have equated to about 2.5 per cent of the cash it has generated.