The following article about NAMA’s interests in Northern Ireland was published here in February 2013. It is interesting that in response to a question at an AEJ lunch in Dublin, the Agency’s Chairman Frank Daly quoted a figure of €1.34 billion as being the market value of property it owned in the North in November 2009, representing 4% of its portfolio. At the end of 2012 NAMA had 143 parcels of NI land or properties subject to enforcement action. I am not making any allegations of inferences about what has happened in the intervening period, and will leave it up to others to do the sums. But no doubt readers will be familiar with the latest stories concerning the sale in June last year of NAMA’s 850-property portfolio (known as Project Eagle) involving debtors from Northern Ireland (book value of €5.62 billion) for around €1.5 billion to Cerberus Capital Management (based on exchange rates for 20/06/14). NAMA “is fully satisfied, having taken advice from Lazard, that the process delivered the best possible return that could have been achieved for Irish taxpayers”, and Cerberus says there were no improper or illegal fees paid, according to a report in The Irish Times. It was one of the largest transactions so far by NAMA and seems to be turning out as its most controversial one.
Meet one of Northern Ireland’s biggest property owners. Frank Daly is Chairman of the Republic’s National Asset Management Agency. It was set up by the Irish government in December 2009 to deal with 12,000 risky loans in Irish banking arising from the collapse of the property market. Five institutions particpate in the scheme: Allied Irish Banks (trading in the North as First Trust Bank); Bank of Ireland; Anglo Irish Bank (IBRC); Irish Nationwide Building Society; and EBS Building Society, now a subsidiary of AIB.
Mr Daly did not have an up-to-date figure to hand about the value of property securing acquired loans in Northern Ireland now controlled by NAMA. But he quoted a figure of around €1.34 billion, which was the market value of property in November 2009 and represented around 4% of NAMA’s portfolio. He said there had been extensive engagement with the Stormont Executive and that the Agency had developed a very good relationship with the Finance Minister, Sammy Wilson.
When both men met in June last year, more loans must have been transferred to NAMA because it was estimated that their property portfolio in the North was worth over £3 billion. At the time Mr Wilson according to a BBC report stressed the importance of the Agency’s involvement in Northern Ireland. He said he was pleased with the finance being made available by NAMA for the development and purchase of sites there. He believed it would help to stimulate some much needed activity in the local property and construction markets and that its work was going to be very important for years to come.
NAMA publishes a list of land and properties subject to enforcement action. At the end of last year, it had a total of 143 in every county in Northern Ireland. The list includes (in a random examination) properties in Dungannon and Aughnacloy in Tyrone, Enniskillen and Lisnaskea in Fermanagh, Armagh; Dromore, Banbridge and Newry in County Down, and Coleraine in County Londonderry. In County Antrim, it includes areas such as Lisburn and Belfast, where some pubs are listed as well as the high-rise Windsor House office building.
Mr Daly told a lunch in Dublin organised by the Association of European Journalists that the Agency’s approach is the same on both sides of the border, namely to work with debtors to enhance the value of assets and to keep businesses trading. Its primary commercial objective is to obtain the best achievable return for the Irish taxpayer, he said.
The bad loan agency has generated sales worth €11 billion since its inception. Mr Daly said the Irish government’s recent decision to liquidate Irish Bank Resolution Corporation (formerly Anglo Irish Bank) and direct NAMA to acquire the unsold residual element of its loan portfolio would significantly increase the Agency’s workload.“Potentially, depending on the scale of loan transfers, the size of our balance sheet could increase by close to 50 per cent”, he explained. The liquidator has until August to decide what to do with IBRC assets. The overwhelming majority of assets on NAMA’s balance sheet are of a commercial property nature and if the Agency took on the IBRC’s mortgage portfolio, it would be a new departure for them.
The NAMA Chairman said it might be time for some entity at a national level to take a central, co-ordinating, policy development role in relation to the residential property market. He also announced details of their plans to develop new commercial and residential projects as part of a €2 billion investment programme in Ireland, including the development of significant additional office accommodation in the Dublin Docklands. He said the Agency was firmly on target to achieve targets for reducing debts by the end of 2013 by 25% and fully by 2020. The full script of Mr Daly’s speech can be found here on the NAMA website.