Nama could deliver profit of €500m when it winds down

The National Asset Management Agency could deliver a profit of €500 million to the State when it winds down its operation in late 2017 or early 2018, its chief executive Brendan McDonagh told the Oireachtas finance committee yesterday.

The statement followed persistent questioning from Fianna Fáil’s finance spokesman Michael McGrath about what return taxpayers could expect from Nama when it finally winds down its operation.

Mr McDonagh said the figure was based on current assumptions about “market conditions”.

He reminded the committee that Nama paid €32 billion for €74 billion worth of face-value loans from Irish banks more than four years ago. The surplus for the exchequer is on the amount Nama paid for the loans.

Mr McDonagh also revealed that about 100 of its 800 debtors have so far exited Nama since it began its work.

Of its loan sales over the past 18 months, 88.5 per cent have been to US investors. Domestic buyers accounted for 6.9 per cent of sales, with Germans at 3.5 per cent and UK buyers at 1.2 per cent.

Higher offer

Mr McDonagh was asked why Nama had sold the loans associated with Cork developer Michael O’Flynn to US private equity giant

Blackstone

for €1.1 billion when a higher offer had been received.

“Nama accepted the best offer it got,” he said, adding that Blackstone’s offer was an “all-cash” one while the higher bid was “conditional”.

Nama has never revealed the identity of the party that submitted the higher bid but it is believed to have been New York-based investment group Davidson Kempner. The higher offer is understood to have been less than €3 million extra.

Independent TD Lucinda Creighton pressed Mr McDonagh and Nama chairman Frank Daly on the measures the agency was taking to ensure that staff who left the agency were not moving to groups interested in buying its assets.

Mr Daly replied: “We can’t stop people leaving Nama and we can’t stop where they they go...they have rights.”

He said Nama had a six-month cooling off period for exiting staff. “That means we’re paying them and they’re sitting at home.”