Nama chief denies agency worsened housing crisis by selling land to speculators who failed to develop it

'Nama is never responsible for housing policy,' Brendan McDonagh told PAC. Picture: Gareth Fuller/PA Wire

The head of Ireland’s ‘bad bank’ has said he “doesn’t agree” Nama further compounded the country’s housing crisis by selling land to speculators who then refused to develop it.

Brendan McDonagh, chief executive of the National Asset Management Agency, told the Public Accounts Committee if the body had not sold land in the manner it did, “there would be 44,500 less houses out there for people to live in”.

Put to him by People Before Profit TD Paul Murphy that land speculation by developers on the back of Nama’s land sales had served to exacerbate the housing crisis Mr McDonagh replied “I don’t agree with that”.

“I felt we had a job to do, we had to realise cash to pay down debt. We had to get the best commercial price,” he said. “Nama is never responsible for housing policy.

“There is only so much Nama can do.”

The agency’s appearance at PAC came as it begins its final wind-down before closure, 17 years after its inception in the wake of the banking crisis which laid the global economy low.

Just nine staff remain at Nama at present, with eight of those due to be reassigned within the National Treasury Management Agency with a remit to process Nama’s formal closure. Mr McDonagh is the ninth employee who will also be returning to the NTMA, where he had worked prior to Nama’s creation in 2009.

The PAC heard Nama will eventually return a net benefit to the State of €11.2bn, totalling €5.6bn in profit returned to the exchequer, and an additional €5.6bn originally supplied to Irish banks to aid their recovery, money which was recouped in full.

All told, some €74bn in bank loan assets were taken over by Nama at a discounted price of €31.8bn. Roughly €35bn pumped into failed banks Anglo Irish Bank and the Irish Nationwide Building Society was never recovered.

Mr McDonagh said he would “stand over wholeheartedly” the claim Nama had gotten the best financial return possible for the investments it had made following the crash.

He denied the agency had been party to a number of ‘firesales’ of State land assets — such as Project Eagle, the controversial 2014 sale of €6bn worth of Northern Irish property loans for just €1.6bn to US property investment fund Cerberus.

“When Nama acquired the loans, prices were still continuing to fall rapidly,” he said, adding the body had in fact “resisted the firesale of assets which the ECB [European Central Bank] had wanted to do”.

He said that deal would have resulted in Ireland only recouping around €15 billion of the asset value the State had taken on in bailing out the banks.

He said a number of developers could have survived the crash if they had simply engaged with Nama rather than going into receivership and taken litigation against the agency.

“I know one major guy, because he came to me afterwards, and he litigated against us, and he met me afterwards and said to me he 'made a huge mistake’. He's not back in the business now. He said: ‘I see all these guys now back in business, I should have swallowed my pride',” Mr McDonagh said.