NAMA chief says we must stop ‘demonising’ developers

THE chairman of the National Asset Management Agency (NAMA) said that Ireland must stop “demonising” developers, builders and banks if we want to have a successful country in the future.

Frank Daly said that it’s not popular to talk positively about developers or banks in this country, but the reality is banks “served this country extremely well and they will serve this country well in the future, and so did developers and so did builders.

“It is totally unrealistic to think that we should continue demonising developers, builders and banks and that we will still have a successful country in the future. We need them as part of our infrastructure in the future,” he said.

The NAMA chief, who was speaking at the Cork Chamber Business Breakfast in association with the Irish Examiner, said that at this stage the agency has acquired the property loans of about 850 debtors which total €72.3 billion. The loans of the 30 largest debtors total €27bn. In addition, 57 enforcement orders have been issued directly by NAMA, or by the banks with the direction of NAMA.

The agency chief also said that the commercial real estate market in Ireland may be “close to the bottom of the cycle”. With residential property, however, he said it is very hard to say if we’re at the bottom or near the bottom.

One of the major challenges NAMA had to deal with was the “diverse and conflicting array or expectations” that have been placed upon it by various interests and commentators. Mr Daly added, however, that it remains the agency’s “overriding objective” that it should break even in as short a timeframe as is “reasonably practicable.

“Needless to say, this does not mean that we force our debtors to engage in a precipitative fire sale of assets, a strategy which would be totally counter-productive and which may realise only a fraction of what the assets are intrinsically worth. Nor do we sit around in the hope that some fine day the current market hangover will cure itself,” he said.

Mr Daly said NAMA must ensure that property is available, not at the aspirational values that prevailed during the boom, but at prices that purchasers are willing to pay.

He said that a change in the law would be required to enable NAMA to disclose information about a debtor.

“However, even if the law were to be changed there is still no certainty that the amended legislation would survive a constitutional challenge if a debtor initiated proceedings to protect what he would perceive to be his right to confidentiality and to privacy,” he said.

Mr Daly also said that the disclosure of information about the business interests of a debtor would likely place NAMA at a commercial disadvantage.

“For instance, information about the consideration paid by NAMA for a debtor’s loans could be very useful to an external party interested in purchasing or refinancing the loans, or buying some or all of the assets securing the loans,” he said.

NAMA will soon include on its website a database of properties which are under the control of receivers appointed to enforce against NAMA debtors. Mr Daly said the taxpayer does not owe any debtor a living and certainly does not owe any debtor an unrealistic lifestyle, especially if that debtor cannot repay his debts.