Agency vows to protect taxpayers

NAMA said it will take whatever actions necessary to protect the interests of the taxpayer as it moved to take over the first batch of €81 billion worth of loans from the country’s banks.

NAMA will pay an average discount of 47% on the first block of loans it is buying from the financial institutions. This discount is well ahead of the Government’s initial 30% estimate.

It will apply this discount to a €16bn value on 1,200 loans being taken over in the first tranche.

Some €3.29bn of loans from AIB will have a 43% discount applied while loans from Bank of Ireland with a book value of €1.93bn will have a 35% discount.

Irish Nationwide Building Society is transferring €670 million of loans. The discount will be 58%.

Anglo Irish Bank, which was nationalised last year, is transferring loans with a book value of €10bn. NAMA will pay €5bn.

NAMA eventually plans to take over about €80bn of loans from five lenders.

Chief executive of NAMA, Brendan McDonagh, said the “sole focus” at the agency is to bring “proper and disciplined management” to the loans and borrowers with the aim of achieving the best possible return and to protect the interests of the taxpayer.

“We will assess each borrower’s viability rigorously over the coming months as part of the business plan review process which will be a new start for all the parties involved.

“NAMA is willing to engage with an open mind to our acquired clients but I wish to reiterate that we require full disclosure of all material information and we will not waste time with borrowers who do not wish to cooperate.”

Borrowers whose loans have been acquired by NAMA will be required to submit a comprehensive business plan in accordance with the agency’s template within one month outlining how they propose to honour their loan commitments.

The Government’s aim is that NAMA will free banks of toxic property loans and revive lending.

It was first announced by Finance Minister Brian Lenihan one year ago.

NAMA completed the transfer of the initial tranche of loans from Irish Nationwide Building Society and EBS on Monday.

It will transfer the first batch of loans from Bank of Ireland on Friday and expects to complete the acquisition of the first tranche of loans from AIB and Anglo by early April.

NAMA expects to complete the transfer of the remaining loans from all five institutions by the end of the year and no later than the end February next year, which is the deadline that has been set by the European Commission.

Chairman Frank Daly said: “NAMA is a key element in resolving the difficulties of the Irish banking sector. We will remain resolutely focused on taxpayers’ interests as our work continues in the months ahead.”

The agency also said it has secured a combined investment of €51m from three institutions for a 51% shareholding in NAMA.

The investors are Irish Life Assurance, New Ireland and major pension and institutional clients of AIB Investment Managers.