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 Lenihan on defensive as Nama revises estimates down 7/6/2010 - 6:16:56 PM Finance Minister Brian Lenihan has denied that the Government got its sums wrong on the National Asset Management Agency (Nama) as the agency revised its estimates downwards today. Nama published its first quarter report this evening and has scaled down the prospects for a profit. It is now predicting a possible profit of €1bn, with the possibility of losses of up to €800m, after an initially projection of more than €4bn. The amount of loans that are “income producing” (loans which are not at least paying the interest due on the monies borrowed) is at 25%, significantly less than the 40% level indicated by the participating institutions last October. The plan published today updates and revises the interim business plan published in October of last year which was prepared on the basis of information supplied at that time by the five participating institutions (Anglo Irish Bank, AIB, Bank of Ireland, EBS and Irish Nationwide) and in advance of the detailed examination of any of the key loans by Nama. The new plan anticipates that the average discount applied to the full portfolio of loans acquired will be 50%, reflecting the discount paid on the loans acquired in Tranche I. "Final discounts are applied loan by loan and will only be determined as individual loans are transferred," said a statement. Speaking today, Frank Daly, Chairman of the Board of Nama, said that the Plan provided a robust framework for the challenges ahead. "We have enormous challenges in the months and years ahead but this plan gives us a realistic expectation that we can manage this extraordinary project effectively and return a profit to the taxpayer," he said. "That – together with the rigorous pursuit of all outstanding loans – is our key objective. "To say the least we are extremely disappointed and disturbed to find that, only months after being led to believe that 40% of loans were income producing, the real figure is actually 25%. "We are equally taken aback to learn that the banks were not even using the full range of legal options available to them in order to secure income in respect of troubled loans. "The banks displayed a remarkable generosity towards their borrowers. Nama has no intention of maintaining that approach. "We will pursue all avenues to ensure the fullest possible repayment of all outstanding monies from relevant borrowers and we will work towards increasing the income stream for Nama as soon as possible as part of the debtor business plan review process.” |
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