A report from the National Asset Management Agency shows that it recorded a profit of just over €6m during the second quarter of this year.

Finance Minister Brian Lenihan said NAMA was functioning well 'with transparency and sound governance'.

The report also shows that only 29% of the loans it had taken on were performing, or being re-paid in some form, at the end of June.

NAMA took in €117m in interest from borrowers in the three-month period, while it gave out €47m to developers to complete projects and run their businesses.

NAMA Chief Executive Brendan McDonagh said the agency was now setting out detailed objectives for borrowers after its review of their business plans.

'Based on our experience of engagement with borrowers to date we expect that the majority of borrowers will see the benefit of co-operating fully with us to achieve the best commercial outcome but where they don't or won't, NAMA will have no option but to start enforcement proceedings against them,' he added.

The State spending watchdog, the Comptroller & Auditor General, has also published an initial report on NAMA.

The report looks at the steps taken by NAMA so far to bring in structures and systems to run the agency. The C&AG report said that while these were still evolving, the steps taken so far were 'reasonable'.

The C&AG looked in particular at the transfer of the first batch of loans from the five financial institutions participating in the agency. In these, NAMA paid €7.7bn for loans with an original value of €15.3bn- an average discount of 50%.

The C&AG report said the amount NAMA paid was €1.7bn, or 28%, above the loans' current value on the market. This was because NAMA took into account what it estimated as the long-term value of the assets taken on.

The report said NAMA had increased its staff numbers to 75, with the aim of bringing this to 100 by the end of the year.