Nama to make €200m profit for 2011, says Noonan

THE NATIONAL Asset Management Agency (Nama) is expected to make a profit of €200 million for 2011 and should break even over its lifetime, based on current projections, the Dáil has heard.

The agency supplied the Minister for Finance with its unaudited 2011 accounts and Michael Noonan said these indicated the agency “expects to generate pre-impairment profit of €1.01 billion for the year.

“Taking an impairment charge of €810 million into account, this should generate a profit for 2011 of €200 million.” But the Minister added that the calculation of impairment was “subject to final agreement between Nama and its auditors and the comptroller and auditor general”. He stressed: “I have no role in this.”

Fianna Fáil finance spokesman Michael McGrath asked the Minister if he shared the confidence of Nama’s chairman that the agency would “at least break even over the course of its lifetime”.

Describing the agency as having a “position of absolute dominance in the Irish property market”, Mr McGrath pointed to the €31 billion Nama had paid for the impaired loans and its running costs and asked if Mr Noonan himself believed this would be recovered.

Mr Noonan said it was “unreasonable” for Mr McGrath to expect him “in the first quarter of 2012 to take a different view from Nama about what the situation may be in 2020”. All he could do was give the assurances Nama had given him and also given the finance and public expenditure committee.

“I accept those figures as the best possible estimate at this time.” Mr McGrath also asked when the Minister expected the agency to complete its work and wind up. He suggested, given the changes in the property market since July 2010 that “the business plan be updated” for Nama with a “rigorous analysis”.

Mr Noonan referred to recent analysis by Nama “which indicated the agency would repay all its senior bonds by the end of 2020, with a small surplus given one scenario and a relatively small loss given another scenario”. It was, he said, “predicting a break even under present circumstances”.

The Minister said they did not know what would happen in the Irish property market. It looked as if there was “the beginning of slight growth” but they were not sure what would happen in the UK or the economies of countries where Nama had significant property portfolios. But based on information available to him, he shared the agency’s view “that it will at least break even by 2020”.