THE new NAMA business plan highlights the “massive risk” involved for taxpayers, Fine Gael finance spokesman Michael Noonan has said.
The document proves that the draft business plan, published last year, had been a complete fantasy, Labour finance spokeswoman Joan Burton said.
NAMA is relieving the banks of circa €81 billion of property and development loans in an effort to clear their balance sheets of risky debt and restore them to health.
NAMA will pay only an estimated €40bn for the loans, but critics fear they are actually worth far less and that the taxpayer will take the hit over time.
In its draft business plan published last autumn, NAMA projected that it would make a €4.8bn profit over its projected 10-year lifespan.
But in the revised business plan yesterday, the state agency painted a very different picture, projecting a profit of just €1bn.
The principle reason for the reduced figure is that just 25% of the first tranche of loans acquired by NAMA are “performing” – ie, being repaid in some shape or form – compared with the 40% it originally envisaged.
The plan included two variations on the projected €1bn profit – a best-case scenario where things went better than expected and produced a €3.9bn profit, or a worst-case scenario where losses of €800m were incurred.
Mr Noonan said that taxpayers should never have been forced to take on the risk and responsibility of recovering loans dished out by “reckless” bankers.
“Loans to NAMA are deteriorating so quickly that their future value is almost entirely unpredictable,” he said.
“The rate of deterioration in the estimated quality of the loans being transferred to NAMA highlights the huge risk from NAMA for taxpayers,” he added.
“Last September, it was estimated that 40% were producing incomes. This has now fallen to just 25%.
“At this rate, what will the loans be worth next year? No one knows.”
Ms Burton said that the new business plan represented “appalling news” for taxpayers.
“In the nine months since the draft business plan was published, the people in NAMA have revised their estimate of NAMA making a profit over its life of €4.8bn to a worst-case scenario of losses of €0.8bn – a turnaround in nine months of over €5bn,” she said.
“Clearly the first NAMA draft plan was a fantasy.
“It is difficult to seriously believe the revised plan except in so far that it means more pain and no gain for Irish taxpayers,” she added.
“Far from NAMA loans ‘washing their face’ as claimed in the debate by the (Finance) Minister and his advisor, the taxpayer will be left wiping the egg off their face from this rotten deal which aims to bail out bankers and developers.”
But Finance Minister Brian Lenihan insisted that the taxpayer would not have to bear any losses from NAMA.
“It is important to bear in mind that these projections are for a plan over 10 years; the figures are likely to change over time.
“But the Government has made clear that should NAMA eventually make a loss, the Government will recover this through a surcharge on the banks,” he said.
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