NAMA – National Asset Management Agency

The creation of NAMA was first announced in the April 2009 Irish Budget.
What is this NAMA and what will it do?
The Government line is that NAMA is firstly an asset management company dealing with assets tansferred from banks. NAMA will not be a bank as it will not be taking deposits from the public and will not have a banking licence. NAMA will have loans on its books based on real physical assets, and while some of these will undoubtedly be of better quality than others, they will be a mix of ‘good or performing loans’ and ‘bad or non performing loans’.

The idea is that the NAMA will buy all of the land and property development loans of the six Irish banks of covered by the State guarantee. This means the total potential  value of the loans which will be taken on by NAMA  will be between €80 billion and €90 billion.By taking problem property loans off the hands of the banks, the Government hopes to put those institutions in a position where they can resume lending.
NAMA will probably become the biggest landowner in Ireland. Developers might not yet realise it – but every single land and investment property they own which has outstanding debt could end up in the new National Asset Management Agency

Even if these debts are bought by Nama at two-thirds of their face value – the bill could  be in the region of  €60 billion. ( Ireland’s national debt is currently €54 billion)
It could be 12 to 18 months before NAMA gets going properly. It may need to exist for another 10 to 15 years  – it is  no short-term fix.
Where will the employees will come from, what big shiny office will NAMA  rent?

Is this just a bail out for the developers that the taxpayer and bank shareholders will end up funding? Or is it a viable option that will help get the financial mess sorted. Only time will tell…. if we are all still living here by then and haven’t emigrated!

How To Get a Job in NAMA

First NAMA Transfers Announced

5 thoughts on “NAMA – National Asset Management Agency

  1. I am seeing speculation on the AIB stock board that once NAMA is implemented the PPS of AIB US stock will rise from it’s present level of around $4.80 to $20 or $30 again. I can not see how that would be possible. Has anyone calculated the impact of NAMA on Bank shareholders and is this calculation available. As I understand NAMA presently loans would be moved off the banks balance sheet to NAMA at a discount (to be determined) and the bank wold have to “write down” the difference as a loss. How could that possibly be a positive event for shareholders? Has anyone actually thought this through enough to understand all the details behind how this will work. Disclosure, I do own a small amount of AIB stock that is in the positive return range at the moment. Sounds a bit crazy to me, but it is a modest amount. I am also a customer at AIB in Lismore.

    Respectfuly,

    Chuck Wall

  2. Folks,
    We’re in a sticky wicket here. NAMA is a guaranteed tsunami. To value anything as a percentage of irrational prices at the height of a bubble is utter nonsense. In the long-term property is valued proportionate to rental income. Annual rent is 11 times monthly rent, allowing 8% for a maintenance sinking fund. Historically in Ireland (until the advent of the bubble) a property’s sale value was approx. 11 times annual rent value. Even today in New York a canny Jewish investor won’t pay one brass cent over 11 times annual rent to purchase property. But let’s allow a bit more here for the innate Irish desire to ‘own my own home’. Let’s push it out to an absolute outer limit of 14 times.So, we have a house with a projected mid-term rental income of €1,000 p.m., that’s €11,000 p.a., then the maximum value that can be tagged to that house is 14 times €11,000 = €154k, or realistically 11 times €11,000 = €121k. My math tells me that NAMA will take on debt +maintence +admin. +++ for that house using their mind-boggling unintelligible ‘formula’ of €220k. The whole thing adds up to economic wipeout for Ireland.
    Folks, this is a constitunal Republic, for the greater good of the people, not their enslavement. We need to take control back from the FOOLS we stupidly handed it to. Edmund Burke is turning in his grave.

  3. If the People of Ireland are wondering how NAMA will work out, look no further that Fanny Mae and Freddie Mac over here in the good ‘ol US of A.

  4. 70% of NAMA will go to Anglo Irish a dead bank, that will not lend a single euro in this country. Now tell me its not a bail out for Friends of Fianna Fail.

  5. Is it true that NAMA has refused to record minutes of their meeting. If so, what are they hiding ? Surely in a democracy, a committee,( even a quango,) set up by the government must be open to public scrutiny. We have had enough secrecy. M. Mooney

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