Minister for Finance Brian Lenihan has said a number of major financial institutions will have finalised arrangements with their biggest lenders at the end of this month in relation to the National Asset Management Agency.
The process is proceeding "with considerable expedition," he told the Dáil today.
“The Nama process for the valuation and transfer of loans is well underway,” Mr Lenihan said responding to questions.
“I understand a number of major institutions will be finalised in respect of big lenders at the end of this month. The work is proceeding with considerable expedition. It is essential that the work continues with expedition.”
Mr Lenihan said he accepted that “serious challenges” remained for the banking sector.
“I’ve said before that following the transfer to Nama it is likely that some institutions will require additional capital in order to absorb the losses from these loans. To the extent that sufficient capital cannot be raised independently or generated internally, the Government remains committed to providing such banks and building societies with an appropriate level of capital to continue to meet their requirements.
“This will have to be done in a manner consistent with EU state-aid rules. The level of capital that may be required has yet to be determined. But the financial regulator and my officials continue to monitor the position.”
Mr Lenihan said capital needs would only be identified where there is an indication of the “haircut levels” being applied to individual banks.
“The banks have made, and will no doubt continue to make as necessary, provisions in respect of their mortgage books, consumer lending and commercial lending. It is a matter for each institution to decide, within the appropriate regulations the level of provision to set down for future write-downs.
“It would therefore be inappropriate for me to comment or speculate on the loan books of individual institutions.”
Mr Lenihan said the second Mazars report on credit availability published in December confirmed that while some small and medium-sized enterprises are facing significant challenges accessing credit and the sector in general is more conservative in its borrowing, “nevertheless new lending is still taking place”.
But he said the portion refused credit, especially in certain sectors, “remains a concern for the Government”.
He said work had been ongoing since December with regard to the establishment of a credit review system and that he would examine practices with regard to lending which would help him decide what further steps might be necessary.