The National Asset Management Agency (NAMA) was "broadly successful" in how it managed the process of selling off its assets, according to a new report.
The research, which was carried out by Professor John Fitzgerald, was commissioned by NAMA to assess the agency's performance over its lifetime in advance of its winding down.
NAMA was set up by the then government in 2009 to handle non-performing property loans after the financial crisis.
It bought loans, which had an original book value of about €70 billion for €30 billion, and the banks required capital from the State to cover the shortfall left on their balance sheets. NAMA then sold the loans.
The organisation, which is due to be dissolved this year, has projected it will return €5.5 billion to the Exchequer, which is €300m more than previously thought.
In the report, Professor Fitzgerald analysed how NAMA operated in acquiring assets from the five participating financial institutions - Anglo Irish Bank, AIB, Bank of Ireland, Irish Nationwide Building Society and EBS.
He also considered the agency's statutory objective to maximise the value recovered for the State and the research examined how NAMA's performance compared to the approaches adopted in other jurisdictions.
Professor Fitzgerald concluded the fact NAMA has "realised a significant profit at the end of its 15-year life indicates that it has been broadly successful in how it has manged the process of selling off its assets."
"As NAMA winds down after 15 years, it is clear that the original valuation of the distressed assets, in terms of their long-run value was reasonable, and that the eventual profit of over €5 billion made by NAMA is appropriate on a risk return basis," the Professor said.
He said there will have been "cases where holding on longer would have realised a higher profit."
But he also said there are "some cases where the price NAMA got for some assets is greater than the value of those assets today."
The study found that having purchased the distressed loans, "NAMA's strategy for managing, developing and disposing of these assets was broadly successful."
The report said while it took longer than the initial ten years that was envisaged when it was established, "the bulk of the work had been done within that time scale."
"By taking a more flexible approach to the completion date it has maximised the profit for the State," it stated.
"While not part of its primary remit, in order to maximise the benefit to the State, where appropriate, it supported the development of some of its assets, including supporting directly or indirectly the construction of over 40,000 dwellings," Mr Fitzgerald added.
Professor Fitzgerald said NAMA's lifetime surplus of €5.5 billion is "appropriate" and demonstrated "a reasonable return".
He also said the original valuation of the loans, in terms of their long-run value, "seems to have been reasonable."
"While many critics in the early years suggested that NAMA would make a substantial loss, the cumulative profit NAMA has made over its 15 years of operations makes it clear that NAMA did not overvalue the assets it acquired," he said.
However, Professor Fitzgerald said there is also a question of "whether it undervalued the assets at acquisition, possibly pushing the State into an unnecessary bail-out in 2010?"
The report said the original methodology for the valuation of the assets had been overseen by the EU Commissions as part of its consideration of the amount of state aid involved in valuing the assets based on what they would be worth in the long run once the economy had recovered.
That methodology was designed to "ensure that the price was not set too high, providing unfair support to the banks from whom the assets were being purchased." The long discount rate was set at around 5% a year.
Mr Fitzgerald said NAMA has earned a return of around 12.9% a year, which he concluded "represents a reasonable return on the original investment in NAMA, with all the risks that that entailed."
"Thus, the profit for the State seems appropriate, and the original valuation of the loans in terms of their long-run value also seems to have been reasonable in the light of what was known at the time," he said.
Professor Fitzgerald also found that NAMA played a "crucial" role in identifying issues with financial institutions by valuing loans accurately when acquiring them.
"This helped make clear the magnitude of the recapitalisation of the banking system that the State had to undertake. If this process had been allowed to drag on without a resolution, the eventual recovery of the Irish economy could have been seriously delayed," he said.
The study also found that a resistance by the Government and NAMA to external pressure to sell assets at a faster pace was "the right decision."
"In the early years the Government was under heavy pressure from the Troika to persuade NAMA to sell off its assets more rapidly. The Government, in resisting these pressures, and NAMA in sticking to its preferred disposal strategy and taking adequate time to realise the full value of the assets, made the right decision," it stated.
"It did not make sense for NAMA to begin a substantial programme of assets sales in Ireland in 2011- 2012. The rapid recovery in the Irish economy from 2013 played a vital role in allowing NAMA to obtain what it had judged he long-term value of the assets it acquired", it added.
The study by John Fitzgerald also concluded that one of the benefits of NAMA was that it created "an effective centralised platform to manage 800 debtor connections and the 12,000 loans (secured on 60,000 properties) that it acquired."
He said the banks "did not have the specialised expertise needed to deal with this huge portfolio of problem loans, especially where many of the debtors had loans from multiple banks."
The 38-page report concluded that NAMA is viewed as "a success story" by studies comparing its performance with similar agencies in other countries.
The Chair of NAMA said the agency was "a significant and far-reaching intervention by the Government into Ireland's financial and property markets at a time of unprecedented crisis."
Aidan Williams said now is "an appropriate time to reflect on its performance and on the extent to which it achieved its objectives" as NAMA approaches its wind-down.
"This is an authoritative and important piece of research by Professor FitzGerald that will help to inform debate around NAMA’s effectiveness," he added.
The chief executive of NAMA said the agency has "always measured its effectiveness by reference to its statutory mandate to maximise the value of its assets."
Brendan McDonagh said the report compiled by Professor FitzGerald finds that "NAMA was successful in fulfilling what it was set up to do - a significant surplus of €5.5 billion to the Irish State - whilst also restoring stability to the banking sector and the wider Irish economy."
"NAMA was a workable and effective resolution to the problems created by the poor banking lending practices of the Celtic Tiger era," he added.
