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NAMA on track to complete wind-down by 2025

By March 7, 2024No Comments

Finance Minister Michael McGrath has today confirmed that NAMA will complete its wind-down by the end of 2025 while the Special Liquidation of Irish Bank Resolution Corporation (IBRC) is on track to “substantially” conclude by the end of this year.

The National Asset Management Agency was set up in 2009 to clean the property crash related debts from the balance sheets of the main Irish banks.

NAMA has consistently generated profits since 2011 and has transferred a total of €4.25 billion to the Exchequer – made up of €3.85 billion from its lifetime surplus and over €400m in corporation tax payments.

The NAMA Board said it currently projects that it will generate a lifetime return of at least €4.9 billion by the end of next year – better than expectations.

But it added that this is dependent on market conditions in Ireland remaining “benign” over the next two years and if NAMA retains the requisite staff resources to complete its work in a commercial and professional manner.

The Finance Minister said today that the third report into NAMA under Section 227 of the NAMA Act, which was published today, clearly shows the progress that the agency has made as it progresses into the final stages of winding down.

Mr McGrath said that by the end of 2023, NAMA had generated €47.7 billion cash from its acquired portfolio and has reduced the total carrying value of its loan portfolio to €0.45 billion.

“This strong commercial performance has exceeded expectations and NAMA’s success has been augmented by the agency’s considerable achievements in relation to its supplemental objectives,” Minister McGrath said.

“Internationally, the agency has been cited as one of the best examples of a successful implementation of a State backed asset management company in response to the global financial crisis,” the Minister noted.

He said that 34,000 new homes were funded or enabled by NAMA by the end of last year, while NAMA also made a major contribution to the regeneration of Dublin Docklands through the delivery of new commercial and residential space.

But he warned that the scope to assist with more homes was limited, given that NAMA’s portfolio is around 1% of what it was at its peak.

NAMA chief executive Brendan McDonagh said the latest review comprehensively outlines NAMA’s success in profitably deleveraging its portfolio while making a considerable contribution to commercial and residential delivery in Ireland.

“NAMA’s overall contribution of €10.5 billion to the State, comprising its projected surplus €4.9 billion and recoupment of the €5.6 billion of state aid it paid to the participating institutions, represents a significant outperformance relative to expectations at inception in late 2009,” Mr McDonagh said.

“We are delighted that the Minister for Finance and the Government have entrusted us with additional responsibilities to manage the residual assets and liabilities of IBRC in 2025,” he added.

On the conclusion of the Special Liquidation of IBRC, Michael McGrath said the State had received about €1.7 billion from the process in respect of its unsecured creditor claims, interest on these claims and its holding of the preference shares in the bank.

IBRC was formed from the merger of the remnants of the failed Anglo Irish Bank and Irish Nationwide Building Society.

Joint Special Liquidators Kieran Wallace and Eamonn Richardson were appointed to IBRC in February 2013 to wind up its business and operations.

The process had been due to finish in 2022 but was extended until the end of this year due to the Covid-19 pandemic.

The Minister said any remaining funds left in the liquidation once all remaining tasks are completed will be returned to the State as the owner of the equity in the former bank.

The first surplus transfer of €35m took place in December 2023.

The IBRC loan portfolio had a par value of €21 billion, which included over 15,000 borrower groups and which was supported by collateral based in 22 different jurisdictions worldwide.

At the time of the publication of the tenth progress update report last year, its remaining loan book had a par value of €3.6 billion.

The Minister said that as the Special Liquidation of IBRC is wound down this year, any residual activity will be transferred to NAMA for management during 2025.

Article Source – NAMA on track to complete wind-down by 2025 – RTE

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