The Department of Finance has today (Thursday) published the second review of NAMA under Section 227 of the NAMA Act which covers the period 2014 – 2018.
Section 227 of the NAMA Act requires the Minister for Finance to assess the extent to which NAMA has made progress toward achieving its overall objectives, and decide whether continuation of NAMA is necessary having regard to the purposes of this Act.
Speaking on the publication of the Review the Minister for Finance, Public Expenditure & Reform Paschal Donohoe T.D. stated:
“I very much welcome the publication of this second report into NAMA under Section 227 of the NAMA Act. The review reflects the exceptional progress that NAMA has made in achieving its overall objectives since 2014 during which time NAMA has repaid all of its €30.2 billion senior debt and now expects to be in a position to return €4 billion of a surplus to the Exchequer subject to market conditions. Following the review I remain confident that NAMA remains fully on track to achieve its overall objectives and so continues to be necessary having regard to the purposes of the Act.
“I am also taking the opportunity of this review to finalise my plans in relation to the eventual wind-down and dissolution of NAMA. A short extension to what was originally planned is required to allow NAMA to continue to work through a small quantum of residual loans in order to maximise the return from these assets to the State. These loans represent less than 1% of what NAMA originally acquired and will be resolved during the period 2021 – 2025 by a much reduced NAMA team which will also manage ongoing litigation appropriately.
“Furthermore, in recognition of the important role that NAMA’s social housing vehicle, NARPS, makes to this sector, I am directing the Board of NAMA to retain ownership of NARPS so that the vehicle will form part of the assets to be transferred to the State once NAMA has completed its deleveraging activities thereby preserving a secure long term portfolio of social housing into the future.
“I am very happy to acknowledge the progress NAMA has made and would like to thank the board, management and staff of NAMA for their continued efforts in the interests of the Irish taxpayer.”
The Minister for Finance, Public Expenditure & Reform Mr. Paschal Donohoe T.D., will lay the Section 227 Review of NAMA before the Houses of the Oireachtas this afternoon.
ENDS
Note to Editors
The Minister for Finance is required to conduct a review every five years under Section 227 of the NAMA Act that;
- shall assess the extent to which NAMA has made progress toward achieving its overall objectives, and
- decide whether continuation of NAMA is necessary having regard to the purposes of this Act.
Following the completion of the report and taking into account what NAMA has achieved to date the Section 227 report concluded that:
- NAMA is making considerable progress across its mandate and it is clear that the Agency needs to continue in order to complete its remaining tasks and generate the largest achievable surplus by the time it completes its work.
- NAMA has the potential to exceed its current expectations should it be allowed additional time to continue to work through a small quantum of residual loans for a period beyond its original expected end date of 2021. The loans concerned represent less than 1% of NAMA’s original portfolio and it is clearly not in the taxpayers’ interest to impose a deadline on NAMA which would see it forced to take commercial decisions which go against its obligations under Section 10 of the NAMA Act where it is not necessary to do so. Therefore it is recommended that NAMA is allowed additional time to work through its residual loan portfolio with a view to submitting a detailed wind-down plan for its ultimate dissolution to the Minister for Finance by the end of 2021.
- This limited extension of NAMA will not delay the commencement the transfer of the NAMA surplus to the Exchequer in 2020 as originally envisaged. It is currently anticipated that NAMA will deliver €2 billion of its surplus in 2020 and a further €2 billion in 2021 subject to current market conditions prevailing.
- In recognition of the important role that NAMA’s social housing vehicle, NARPS, makes to this sector, it is recommended that a direction is issued to NAMA pursuant to section 14(2) of the NAMA Act instructing the Board of NAMA to retain ownership of NARPS so that the vehicle will form part of the assets to be transferred to the State once NAMA has completed its deleveraging activities thereby preserving a secure long term portfolio of social housing into the future.
- Furthermore, in recognising the important work being undertaken across Government in the area of housing, it is recommended that NAMA continue to engage actively with the Land Development Agency and other State bodies to identify areas of mutual interest and potential collaboration to ensure that NAMA’s activities are aligned to other policy responses in the area of housing to the maximum extent possible while ensuring that NAMA remains faithful to its overall objectives and purposes under the NAMA Act.