First NAMA transfers fall further behind schedule

THE first transfer of loans from the troubled banks has fallen further behind schedule. Initially, the time-scale for the transfer of up to €19 billion of bad loans to the National Asset Management Agency was before Christmas 2009.

That initial date wasn’t met and in a new note on the deadline NCB Stockbrokers said yesterday it will be the end of the month before the first loan transfers will now happen.

Ciaran Callaghan, analyst with NCB said the banks probably had significant “administrative” hurdles to deal with concerning the loans being transferred to NAMA.

The amount of detail demanded by the bad bank is said to have been extremely demanding bank sources have previously indicated.

The same level of detail was demanded in the case of every loan destined to end up with the bad bank.

In a note yesterday Mr Callaghan said “the date has slipped again for the first tranche of loan transfers to NAMA. Friday 12th had been mentioned at the latest expected date for the process to begin, but since the banks did not receive an Acquisition Schedule document from NAMA by last Friday, we can take it that the date has moved out again,” he said.

“As we understand the process, one week before the loans transfers are due to begin, the participating banks will receive a list of loans to be transferred, with the associated haircuts on these loans proposed by NAMA,” he said.

Thereafter the banks will then have one week “to contest these valuations formally if they so wish”, he said.

In all €77bn of bad and other property loans are due to transfer to NAMA with the entire process expected to be completed before the end of the third quarter of the year.

The banks are due to get €54bn from the state for those loans, representing a discount of 30%.

Businesses hope the €54bn in fresh funding to the banks will lead to a better lending environment for those currently struggling to keep their operations on track.

Those hopes have been questioned by the IMF.

In a letter last April to the Minister for Finance, Brian Lenihan, the International Monetary Fund said the establishment of NAMA would have no material impact on the amount of money the banks would be in a position to lend to hard pressed customers.