THE MAIN Irish banks could not have been put on the road to recovery without the establishment of Nama, Minister for Finance Brian Lenihan said last night

He said the behaviour of the banks in failing for so long to disclose the full extent of their property losses had fully justified the decision to establish Nama.

“The name of the agency was blackened and blackened considerably by Opposition parties and many commentators but, despite that, it has done an excellent job,” Mr Lenihan told political correspondents.

Commenting on Nama’s revised business plan, Mr Lenihan said a more optimistic interim report last October had been produced at the request of the Opposition and it was based on information supplied by the banks.

“The quality of the loans was poorer than had previously been claimed by the banks. These revised estimates reflect that deterioration. These factors have led to the higher than expected discount on the loans transferred to Nama, thus protecting the interests of the taxpayer,” said Mr Lenihan.

He said that the central scenario in the Nama business plan estimated a profit of €1 billion over its lifetime, while a more optimistic scenario showed the return could be €3.9 billion and the most stressed scenario projected a loss of €800 million.

“It is important to bear in mind that these projections are for a plan over 10 years; the figures are likely to change over time.

“But the Government has made clear that should Nama eventually make a loss, the Government will recover this through a surcharge on the banks.”

Mr Lenihan said the bottom line was that Nama would never cost the taxpayer anything and might even make a profit of €3.9 billion.

Fine Gael finance spokesman Michael Noonan said the Nama business plan had reinforced the massive risk the Government was taking on behalf of Irish taxpayers.

Pointing to the latest estimate of 25 per cent of income-producing loans rather than the earlier estimate of 40 per cent, he said no one could say what they would be worth next year.

“Irish taxpayers should never have been forced to take on the risk and responsibility of recovering loans which were dished out by reckless bankers. Fine Gael offered a credible alternative that would have forced the banks to recognise their losses while retaining the responsibility to recover loans. The Government refused to back this alternative,” said Mr Noonan.