The winding up of the National Asset Management Agency (Nama) has been delayed by a year, the Dáil has heard.
The so-called “bad bank” agency is not now expected to be wound up until 2021 despite earlier Government predictions for its business to be completed by 2020.
Minister for Finance Paschal Donohoe told Fianna Fail finance spokesman Michael McGrath that Nama "is expected to substantially complete its work by the end of 2021" with a surplus of €3.5 billion projected to be returned to the State.
Mr McGrath said that up to now the projected timeline was 2020.
The Minister said the information he had was that they will have the work complete by 2020/2021. “So I would expect that work will continue into 2021.”
Nama expects the final major sales to be completed by the end of 2018 and the focus after that will be on the Dublin docklands SDZ (strategic development zone) and residential delivery programmes, Mr Donohoe added.
When Mr McGrath asked for further clarity on what Nama would be doing up to 2021 the Minister the department was currently discussing this with them.
He said the Government had an agreement with the European Commission “on the point at which Nama will come to an end. We will be delivering on that commitment.”
But he said they wanted to see if they could use the expertise and skill built up with Nama and retain that for the State while still meeting the European Commission commitment for the winding up of the agency.
The agency was established in 2009 during the financial crisis and paid a discounted rate of almost €32 billion for some €74 billion of risky commercial property loans from five Irish bailed-out lenders.
Nama last year announced it had redeemed all of its €30.2 billion in senior debt which was guaranteed by the State and in April this year it began redeeming €1.6 billion in subordinated debt.
The Minister said despite the successful repayment of the State’s contingent liability three years ahead of schedule “there is still a significant body of work yet to be completed”.
Mr Donohoe said the €3.5 billion surplus “has yet to fully crystallise”.
Reaching that €3.5 billion depended on the success of Nama’s ongoing deleveraging, in particular its Dublin docklands SDZ programme and the residential funding programme.
By 2020 the real estate and financial assets support by Nama funding will comprise a relatively small portfolio of liquid commercial and residential exposures.
“The final phase of Nama’s deleveraging will be slower with few major sales,” the Minister said.
At the end of 2017 the carrying value of loans €3.2 billion net of impairment and about 64 per cent of that was Dublin 10 per cent in Dublin and most of the rest of is split around the State.
Mr Donohoe said Nama was looking at how they would de-risk different positions they had so that by the time they get to 2020 so that the assets they had compromise a very small percentage of the total amount of exposure Nama would have to deal with.
