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A ghost estate in Co Laois. Almost 10% of Nama loans relate to unfinished properties Eamonn Farrell/Photocall Ireland

'Considerable challenge' for Nama to break even - official report

Falling house prices and disappointing rental returns mean the taxpayer may not recoup money poured into Nama, a new Government report suggests.

NAMA FACES SIGNIFICANT difficulties in achieving its aim of breaking even for the taxpayer, according to an official Government report.

The special report from the Comptroller and Auditor General warns that the toxic bank faces “considerable challenges” to avoid making losses which could be in the billions.

Several major “risks” threaten the goals of agency, which has taken over loans with a face value of €74billion, the report said.

Rental incomes from most developments are lower than expected, the report says in a summary of its findings, while other elements of some business plans agreed with developers had failed to succeed.

For six borrowers, 2011 rental income was around 26 per cent less than that projected at acquisition and, for this sample, only €8 million out of €10.5 million subsequently projected in business plans had been realised.

Nama has also recorded losses due to the ongoing fall in house prices. CSO statistics published today show that property values in Ireland have fallen by around one-sixth in the last year.

Overall the agency has received a total of €6.2billion in cash since its establishment, the report says. However, it warns:

Ultimately, the minimum target has to be to recover at least its outlay and costs from the interim management and ultimate disposal of the loan assets. NAMA faces considerable challenges in achieving this income goal.

Almost one in ten of Nama’s loans relate to ghost estates or other unfinished developments. Some 71 per cent of the loans are on completed buildings, while 20 per cent relate to land.

More: NAMA to invest €2 billion in unfinished developments, new construction sites>

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16 Comments
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    Mute LoyalIrish Citizen
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    May 24th 2012, 7:52 PM

    So in summary NAMA (No Assets Management Agency) is a con designed to get Bankers, Developers and Politicians off the hook.

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    Mute John Conniffe
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    May 24th 2012, 8:16 PM

    Nah, the recession’s killing them just as it’s killing everybody else..

    20
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    Mute censored
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    May 24th 2012, 8:36 PM

    Oh noes, will the property developers have to take a wage cut?

    18
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    Mute John Conniffe
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    May 24th 2012, 8:39 PM

    That implies they’re still drawing down a wage.

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    Mute Ciaran Morgan
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    May 24th 2012, 10:27 PM

    Bullshit. Two thirds of developers with loans in Nama are on the payroll.
    Mick Wallace hasn’t paid a cent of his debts despite court judgements against him, nama was set up to protect developers.

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    Mute censored
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    May 24th 2012, 10:28 PM

    So they changed it? Last I read was end of 2011.

    In a presentation to the Committee of Public Accounts in the Oireachtas this morning, NAMA revealed that it was paying two property developers managing “multi-billion euro portfolios” €200k a year and that between 110-120 are also on its payroll earning anything from €70-100k.

    Plus bonuses.

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    Mute Dermot Purcell
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    May 24th 2012, 9:52 PM

    believe at your peril anything that this goverment or any of its arms or institutions say ,CORRUPTION is what has brought this country to its knees ,this country is in a death grip with organised crime .

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    Mute rita martin
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    May 24th 2012, 10:48 PM

    Yesterday Nama was proposing spending 2 billion on development works.something doesn’t add up here.

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    Mute Jennifer Lynch Ankers
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    May 24th 2012, 9:06 PM

    these 3 storey apartments are right next to my home they look so out of place and have lost value of my home because of it.they should of never being build in the first place they are a disgrace and they are destroyed in the inside from being idol 4 years.i was disgusted when they got the go ahead to build them they block my sunlight and my privacy is gone hate them.

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    Mute Adam Magari
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    May 24th 2012, 10:45 PM

    But it still plans to spend 2 billion, presumably to help it break even. What a sick joke. The largest state property in the world completely beyond democratic control and no one in government bats an eyelid. Where is the outrage of the smoked salmon socialists now? Don’t see Rabitte, Gilmore, Burton, and the rest out and about with some smart NAMA put down. Very unlike their opposition selves.

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    Mute Sean O'Keeffe
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    May 24th 2012, 8:24 PM

    “Things in our country run in spite of government, not by the aid of it.”
    Will Rogers

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    Mute censored
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    May 24th 2012, 8:35 PM

    I am shocked by this unexpected news!

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    Mute Popsicle Pete
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    May 24th 2012, 10:52 PM

    What a load of boring and predictable replies as usual.
    Weirdos

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    Mute Kerry Blake
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    May 24th 2012, 11:35 PM

    No surprise there once they flog off the assists outside of Ireland what are they left with? Could have told them that would be the problem when NAMA was set up.

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    Mute iBob101
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    May 25th 2012, 8:12 AM

    It’s very hard to see how NAMA has been of any benefit. Its a huge new quango with lots of well paid jobs doing the work that was being done by bank employees. Now the bank employees are being laid off, the banks still aren’t lending, and the properties still haven’t magically fixed themselves.

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    Mute Jackie Crowe
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    May 25th 2012, 9:27 AM

    as if we did not say that from the start,,, another government incentive for their mates,,, high pay, and look at the property they are running it from,,, why did they not run it from a small building they had on their books,, laughable ireland again at its worst,, ff, fg and labour should be left out to pasture, they have lost the plot in a recession

    1
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