Nama earned €20m in profits in first quarter of year

The National Asset Management Agency (Nama) earned profits of €20 million in the first three months of the year, figures published on Tuesday show.

The State agency’s report for the first quarter of 2021 shows that it earned €114 million in cash over the three months ended March 31st from selling loans, property and repayments from its borrowers.

Nama earned a profit of €20 million for the quarter, a turnaround from the €49 million loss it reported for the same period in 2020, when Covid-19 uncertainty hit the value of its properties.

"The impact of the Covid-19 pandemic on the markets in which Nama operates has been material," chairman Aidan Williams and chief executive Brendan McDonagh, say in a letter accompanying the figures to Minister for Finance Paschal Donohoe.

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“ However, Nama continues to make every effort to mitigate the financial and other impacts using measures under our control.”

Nama bought Irish bank’s property loans for €31.8 billion in 2010 and 2011 in a bid to save the lenders from insolvency following a financial crash.

By the end of March, the agency had generated €46.3 billion in cash. It had repaid the €32.7 billion borrowed to fund the loan purchases by the end of March last year.

Nama had transferred €2.5 billion of its projected €4.25 billion surplus to the Exchequer by the end of last month.

In June it handed over €300 million to the State, bringing the total for this year to €500 million. The State agency transferred €2 billion in 2020.

Surplus

Earlier last month Nama predicted that its final surplus would reach €4.25 billion, €250 million more than previous forecasts, which pegged it at €4 billion.

The agency cautioned that the increase in its surplus depended on market conditions.

Combining the €4.25 billion surplus with the €400 million tax on profits that it has paid since 2016, the agency expects to have contributed a total of €4.65 billion to the Exchequer by the time it is wound up.

Nama intends paying off the balance of the surplus this year and in 2022, market conditions allowing.

In the letter, Mr Williams and Mr McDonagh tell the Minister that the agency has facilitated the construction of 20,055 new homes since 2014.

They point out that 12,823 were built with direct funding from the agency, with the balance on sites sold by Nama’s debtors or receivers, or where the associated loans were sold or refinanced.

Another 6,058 homes are under construction, while sites likely to hold up to 7,397 dwellings are at various stages in the planning system.

Last month, Nama sold 80 per cent of its 37.2 acre site in Poolbeg, Dublin to a consortium of Ronan Group Real Estate, Oaktree Capital Management and Lioncor Developments for €200 million. The agency will keep its 20 per cent share.

The developers will build 3,500 new homes on the site, one in four of which will be either social or affordable.

Nama says that it had provided councils around the Republic with 2,064 social homes by the end of March this year, ahead of its target of 2,000.