Nama’s retained earnings up 5% to €3.73bn at end of first half

Nama’s retained earnings rose by 5 per cent to €3.73 billion in the three months to June as the so-called bad bank’s profits were boosted by ongoing asset and loan sales.

The agency said in its latest report, published on Wednesday, that it posted a €222.6 million profit for the second quarter, bringing the figure for the first half of the year to €281.3 million, up 44 per cent on the same period in 2017.

Earnings for six months were helped by €46.3 million of gains from the sale of loans and €33.3 million of profits from the disposal of trading property assets. Total cash generated by Nama was unchanged at €1.5 billion during the first six months.

Nama, which paid a discounted rate of almost €32 billion for some €74 billion of risky commercial property loans from five Irish bailed-out lenders during the financial crisis, has subsequently seen the carrying value of its loan portfolio fall below €3 billion, net of impairment provisions.

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Nama has upgraded its lifetime surplus forecast a number of times in recent years, most recently raising its projection to €3.5 billion in June from €3 billion. Analysts at Investec Ireland estimate it will ultimately deliver a €4.5 billion surplus.

The agency, which last year completed the redemption of €30.2 billion of senior Government bonds it used originally to buy the loans, has subsequently bought back €529 million of its total of €1.6 billion of junior bonds. If Nama made a lifetime loss, as many feared when the agency was set up, these junior bonds would have been worthless.

Nama said on Wednesday that it aims to complete the repurchase of the remaining junior bonds by March 2020.

Housing

Nama was given the task in 2015 of delivering 20,000 houses and apartments by 2020 under a plan to help the State deal with a shortage of homes and mounting homeless crisis.

In a letter to the Minister for Finance Paschal Donohoe, also published on Wednesday, Nama chairman Frank Daly and chief executive Brendan McDonagh said that some 7,881 homes had been delivered as of the end of August, with a further 2,862 units under construction. An additional 8,144 units had planning permission but were not yet being built.

The agency is also involved in projects to deliver millions of square feet of office and other commercial space in the Dublin docklands under a fast-track Strategic Development Zone (SDZ) designation.

Of some 4.2 million sq ft of commercial space envisaged in 2014, 760,000 sq ft has been completed or sold, while construction has commence on a further 2.56 million sq ft.