A NUMBER of financial institutions have asked for a sharp reduction in the amount of information sought by the National Asset Management Agency (Nama) on each loan to speed up the transfers after the top 10 borrowers are moved.
The vast amount of paperwork and financial detail demanded by Nama has delayed the transfer of the top 10 borrowers as it copes with a bottleneck of information from valuation and legal reports.
The lenders must provide more than 1,000 pieces of data on each loan facility in response to a questionnaire created by Nama’s advisers, London-based investment bank HSBC, which raises 337 queries on each facility.
The lenders are forced to hand over, for some borrowers, tens of thousands of pieces of data, in many cases information which was not on the original loan files.
Some institutions have raised in discussions with Nama the possibility of reducing the level of data sought on the next tranches of loans to be moved to the agency.
They have argued that the loans of the smaller borrowers do not require the same level of detail as their loans are less complex.
The lenders are pressing Nama, which is led by chief executive Brendan McDonagh, to reduce the data requirements to speed up the transfers to meet the proposed completion date of July for all 1,500 borrowers to be transferred.
AIB and Bank of Ireland have each assigned about 400 staff to dedicated internal units to process paperwork, including valuation reports and legal due diligence on property title, required by Nama.
Bank of Ireland has also hired 30 lawyers to conduct due diligence on the Nama-bound loans.
Minister for Finance Brian Lenihan said on Monday that the first loans would be transferred by the end of March, missing another deadline at the end of this month.
The European Commission could be ready to sign off on the Government’s “bad bank” plan by Friday after the EU competition directorate circulated recommendations to other sections of the commission in Brussels.
It has also emerged that the total loans to be moved from the two biggest banks may be lower than estimated as fewer associated loans are transferred to Nama.
AIB will move €23 billion in loans and possibly less into Nama, compared with a previous estimate of €24.2 billion. The bank is seeking to keep more UK commercial property loans out of Nama.
Bank of Ireland’s loan transfers may total less than €14 billion compared with the €16 billion first estimate as some loans have been refinanced since the first estimates were provided last September.
While the total loans moved will be lower, the average discount paid is expected to be higher to match worse-than-expected valuations.
State-owned Anglo Irish Bank is now expected to transfer between €30 billion and €35 billion – higher than the original €28 billion estimate – as more associated loans linked to development assets are moved into the State agency.
