NAMA made profit in first half of 2013 - McDonagh

Thursday 26 September 2013 18.38
NAMA chief executive Brendan McDonagh says there is limited demand for some assets in Irish market
NAMA chief executive Brendan McDonagh says there is limited demand for some assets in Irish market

The chief executive of the National Asset Management Agency has said the agency made a profit in the first half of 2013.

Addressing the Public Accounts Committee, Brendan McDonagh said there is limited demand for some assets in the Irish market.

Mr McDonagh said the agency had issued just over €30 billion in Government guaranteed senior debt to the financial institutions from which they acquired the loans in 2010 and 2011.

He said they hope to redeem €750m this week, which will bring the total to date to €7 billion.

NAMA expects to reach its target of €7.5 billion by the end of the year.

Mr McDonagh said the agency's current view is that it will be in a position to redeem all of its senior debt by 2020 and this will eliminate the State's contingent liability.

The committee was told that 28 staff members, more than 10% of all NAMA staff, have left the agency so far this year. This is in addition to 22 staff members who left in 2012.

Mr McDonagh said that NAMA expects it will need to hire between 180 and 220 additional staff to work directly in NAMA if it buys the bulk of the IBRC loan portfolio that is currently for sale by the special liquidators.

The NAMA boss said that such recruitment would be challenging enough at the best of times, but faced with public pay restrictions, he said it had become even more difficult.

Mr McDonagh said with each departure there is a loss of business knowledge, a loss of continuity and momentum.

"In all probability, the exodus will continue as the market improves," he added.

Mr McDonagh also told the committee that he was aware of the rationale for the reductions in public sector pay, and also of the need to ensure no sector is left unaffected by the burden of the adjustment.

When asked about a conflict of interest in terms of staff moving to the private sector, Mr McDonagh said very few people have that level of information.

"There are obligations to comply with the Official Secrets' Act and it is a life long thing," he said.

He said if the agency ever thought someone was using information inappropriately, it would have options under legislation.

On social housing, Mr McDonagh told the committee that NAMA has offered 4,350 housing units to the local authorities.

Of these, over 2,150 were deemed unsuitable or no longer available while over 1,900 housing units were deemed suitable by the local authorities for social housing.

Mr McDonagh told the committee that when the Freedom of Information Act applies to NAMA, the agency expects to have between 500-1,000 requests in the first year.

This will clearly have implications for NAMA and the agency has advertised to recruit four FOI staff.

Elsewhere, Minister for Finance Michael Noonan said NAMA is doing particularly well at present.

The minister said NAMA's figures would suggest that by 2020 all senior debt and all junior debt will have been paid.

He said that if property prices continue to rise, NAMA will transfer a profit to the Exchequer in its later years.