The National Asset Management Agency (NAMA)

The objective of the National Asset Management Agency (NAMA) is to address a serious threat to the economy and to the systemic stability of credit institutions in the State generally by providing for the establishment of a statutory body. The purposes of the National Asset Management Agency (NAMA) include the following:

• Acquiring certain assets from certain persons designated by the Minister of Finance.
• Effecting the expeditious and efficient transfer of those assets to NAMA.
• Holding, managing and realising those assets.
• Performing such other functions relating to the management or realisation of those assets provided for by the legislation or as directed by the Minister of Finance.
• Facilitating restructuring of credit institutions of systematic importance to the economy.
• Taking all steps necessary or expedient to protect, enhance and better enhance and better realise the value of assets transferred to NAMA.

On the 16th of September 2009, Minister for Finance Brian Lenihan announced that National Asset Management Agency (NAMA) will buy loans of an astonishing € 77 billion at a discount of 30%. National Asset Management Agency (NAMA) will pay approximately € 54 billion for loans it has taken over from Irish Banks. The main objective of the National Asset Management Agency (NAMA) is to stimulate bank lending by removing impaired and under performing loans from the balance sheets of Irish Banks to allow them to resume lending and credit flow.

The amount paid for such loans was an estimate based on the long-term economic value of the assets against which the loans were secured. The current market value of these loans was estimated at € 47 million, assuming an average fall of 50% in property values since a peak in 2007. This means the allowance for long-term economic value based on today’s estimates was € 7 billion.

It has been revealed that the following financial institutions will transfer loans to the National Asset Management Agency (NAMA):

• Allied Irish Bank will sell € 24 billion worth of loans
• Bank of Ireland will sell € 16 billion worth of loans
• Anglo Irish Bank will sell € 28 billion worth of loans
• EBS will sell € 1 billion worth of loans
• Nationwide Building Society will sell € 8 billion worth of loans

 

The list of the asset classes transferred to the National Asset Management Agency (NAMA) is as follows:

• 36% of the assets are land.
• 28% of the assets are development land.
• 36% of the assets are commercial loans.

Minister for Finance Brian Lenihan has also stated that two thirds of the loans are related to properties in the Republic while 20% are in the United Kingdom and 6% in Northern Ireland.

The majority of the above loans will have been valued and transferred to the National Asset Management Agency (NAMA) by the middle of 2010.

The proposals for the National Asset Management Agency (NAMA) have received international approval with international agencies such as the International Monetary Fund and the European Central Bank had “commented favourably” on the National Asset Management Agency (NAMA) proposal.

 

 

 

Karl Foley

Press Officer
John McCarrick and Associates
11 Dunville Avenue, Rathmines
Telephone:01 4960102
Fax: 01 4973717
Email: info@jmccarrick.com

 

 

 

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