Asset agency predicts €600m profit before charges

NAMA is expecting to generate a full-year operating profit before impairment charges of around €600 million this year.

The agency’s chief executive Brendan McDonagh addressing the latest sitting of the Public Accounts Committee in the Dáil, yesterday — said that the impairment figure would not be known until the end of the year. In 2010 NAMA posted a net operating profit of €305m; which translated into an overall loss of just under €1.2 billion, due to impairment charges of €1.48bn to cover potential losses on loans it acquired from lenders.

NAMA’s management were also quizzed on the recent review of the agency by former HSBC chief, Michael Geoghegan. The recently departed NAMA board member Peter Stewart said that the Geoghegan review should result in significant changes to the agency’s structure and could be a watershed in its life.

Mr Daly said this wouldn’t be his personal review, although he did say the confidential review had been “very useful to both the agency and the Department of Finance”.

He added that the NAMA board hadn’t, as yet, made any recommendation to Government on Mr Stewart’s replacement.

Mr McDonagh added that a number of parties have shown interest in buying the unfinished IFSC-based office that was due to be the next headquarters of Anglo Irish Bank, adding that he hoped the process would be concluded by the end of next month. He also said that the agency has started offering financing to commercial property buyers.

“Our exposure to the Irish commercial market is of the order of €5.3bn and we’re reviewing a number of strategies in order to monetise this segment of the portfolio,” he said.

He added that NAMA will provide up to 70% vendor debt finance commercial property purchasers under debtor or NAMA receiver control. Purchasers are expected to inject “significant equity capital upfront”, however. Assets likely to attract interest would be large office blocks, shopping centres and other retail and industrial properties.

NAMA has sold over €4.6bn worth of assets this year and under the EU/IMF bail-out agreement has to sell 25% of its loan book by the end of 2013. The agency recently received transfer of a further €2bn worth of loans, completing its acquisitions and bringing its total portfolio of acquired loans to €74.2bn; for which it has paid €31.7bn.