THE NATIONAL Asset Management Agency made a loss of €714.1 million in its first 10 months of operation, according to unaudited accounts lodged with Minister for Finance Michael Noonan yesterday.
Nama was pushed into the red in the period from February 27th to December 31st, 2010, after booking an “estimated” impairment charge of €1 billion relating to the €71.4 billion nominal value of loans that it had received up to that point.
Nama’s audited accounts will not be released until June and it is understood this impairment charge could yet increase.
The percentage of performing loans in its portfolio at the end of last year was just 23 per cent.
The writedown reflects the continuing decline in the value of many of the property and development assets Nama now controls.
The assets were priced at November 2009 levels with Nama originally paying €29.6 billion for the loans from Anglo Irish Bank, AIB, Bank of Ireland, Irish Nationwide and EBS.
Excluding the impairment charge, Nama made an operating profit last year of €285.8 million.
The loans acquired by Nama had increased to €72.3 billion by the end of March 2011, with another €3.5 billion of loans – belonging to Paddy McKillen – “potentially” to be acquired in the coming months.
It has so far acquired 11,500 loans from 850 debtors.
Nama has initiated “enforcement procedures” against seven of the top 30 debtors – Derek Quinlan, Bernard McNamara, the Grehans, Liam Carroll, Paddy Kelly, Paddy Shovlin and Jim Mansfield.
Another five debtors have yet to conclude their negotiations with Nama and the agency’s chairman Frank Daly yesterday indicated that legal actions against these developers could be imminent.
“I expect we’ll see further decisive action in the weeks ahead. It should be stressed again that the only motive behind decisions taken on enforcement is to maximise the return to the taxpayer and where all other viable options have been exhausted.”
Nama has so far provided borrowers with €240 million to complete projects and fund working capital.
The agency had cash balances of €837 million at the end of December – an increase of €213 million on its third quarter to the end of September.
At the end of 2010, Nama had classified 10,726 loans as non-performing. Of this, 8,149 were 120 days or more “delinquent” with their loan repayments. “Nama is addressing this issue,” the agency stated in its quarterly report to the minister.
The accounts show it cost just more than €1 million a week to fund the administration of Nama. Total administration costs ran to €46 million in the first 10 months of operation.
This comprised costs reimbursed to the National Treasury Management Agency (NTMA); master and primary servicer fees; legal and tax fees; financial adviser, audit and secondment fees; portfolio management and credit fees; and other administrative expenses.
The loans agency spent €29.3 million on due diligence costs for the loan acquisitions. These costs are recouped from the participating banks.
Nama now has a staff of 122. The accounts show it spent €7.8 million on salaries in 2010.
Its nine-person board was paid €591,000 in fees last year. But chief executive Brendan McDonagh and NTMA chief John Corrigan did not receive payments as board members.
The agency signed a 10-year lease on its offices at Treasury Building, with an initial six-month, rent-free period.
