The late minister for finance Brian Lenihan, who set up the National Asset Management Agency (Nama) in 2009, left five words ringing in the ears of agency chief executive Brendan McDonagh shortly before he passed away 14 years ago this week.
“Brendan, don’t mess this up,” Lenihan told McDonagh in their last meeting before he died, the Nama chief recalled to reporters on Wednesday.
When Nama took over €72 billion of mainly toxic commercial property loans from five banks for a discounted price of €32 billion, the fear was that it would lose billions.
Even when Ireland was at the end of an international bailout programme in 2013, members of the rescue team told Department of Finance officials that Nama would likely end up with a €10 billion shortfall.
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It wasn’t helped by Nama overpaying to the tune of €5.4 billion for the loans in the first place – adhering to a long-term economic value method forced upon it by legislation to lessen the holes that Nama transfers would trigger in the domestic banks’ balance sheets.
Many objectives have been projected on to Nama over the years, such as fixing the housing crisis, by virtue of the swathes of land it controlled; contributing more to the common good; and providing more homes for social housing, even though local authorities ended up accepting only about 2,400 of the almost 7,000 units offered over the years.
Nama’s remit widened about 13 years ago to deliver thousands of homes and develop land in the Dublin docklands.
But Nama’s core objective, enshrined in the very Act that set it up, was to obtain the best achievable financial return for the State.
It made enemies along the way. Try finding a developer that has much good to say about dealing with Nama officials over the years – even ones that it agreed to work with, while enforcing against others. It’s not difficult to find critics, too, in the halls of Leinster House.
But it is now on track to deliver a lifetime surplus of €5.05 billion – having upgraded its forecast on Wednesday by €250 million – by the time it is wound down at the end of this year. Adding the €5.4 billion it first needed to recoup to break even on the original overpayment actually brings the total financial gains for the State to more than €11 billion.
Lenihan would surely have approved of that outcome.
