The State’s National Asset Management Agency (Nama) made an average €30,000 profit from each of the 13,000 homes whose construction it backed since 2014, its chief executive, Brendan McDonagh, confirmed on Thursday.
Nama, established 12 years ago to bail out Irish banks following the financial crash, will wind up its operations by the end of December 2025. Debtors still owe it €14 billion in loans dating from a property bubble that precipitated the crash in 2008.
Publishing its annual report, Mr McDonagh confirmed that the agency made €400 million profit from the 13,300 new homes whose construction it has funded directly, an average of €30,075 each.
Minister for Finance Paschal Donohoe stressed that Nama had to operate commercially to satisfy EU state aid rules. “Those were part of the conditions that we had to meet to establish this organisation,” he said.
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Mr Donohoe added that the EU would be unlikely to waive those terms, allowing Nama to fund homes for sale below market rates, because of the agency’s “size and scale”.
In all, Nama has aided the building of 24,400 new homes in the Republic. Along with the 13,300 it financed, developers built a further 11,100 on sites where the agency got planning permission, funded enabling work or covered legal and other costs before selling the land.
The agency expects to pay a total €4.5 billion surplus to the State once it is wound up. Adding €400 million in corporate taxes that it has already paid, its total contribution will be €4.9 billion.
The surplus will be what the agency has left after repaying its debts and covering its costs. In 2020 Nama repaid the €31.8 billion it originally borrowed to buy the banks’ loans, leaving the agency with no liabilities.
Mr McDonagh said Nama would continue to pursue repayment of €14 billion in loans that remain on its books. The agency’s accounts estimate that those debts are now worth €715 million.
However, its chief executive noted that Nama had various options for significantly increasing this value, including getting planning permission for development sites against which much of the debt is secured.
Nama and the Government have yet to decide which arm of the State will get its 20 per cent share in the Poolbeg Strategic Development Zone, after its wind-up, Mr McDonagh said.
The agency is joining forces with developer Johnny Ronan to build 3,800 homes and 93,000sq m of offices on a site in Poolbeg, Dublin.
Nama originally paid almost €32 billion for €70 billion worth of property-linked debt from Irish banks faced with insolvency after fuelling a credit bubble.
By the end of last month, Nama had generated a total of €47 billion over its lifetime. Over the last two years it has paid €3 billion of the total surplus to the Exchequer, and will pay a further €500 million in 2022.
Its annual report shows it made a €195 million post-tax profit last year. Mr McDonagh said 2021′s profit was the result of long-term strategies implemented over the organisation’s lifetime.
“It is our 11th year of profitability in a row but the size of our profit is remarkable in the context of the late stage of our operations and the much smaller portfolio that we are now managing,” he added.
Mr Donohoe said he was “pleased to note the increase of €250 million to Nama’s projected lifetime surplus, now forecast to be €4.5 billion”.
