NOTE 8. NET PROFIT ON DISPOSAL OF LOANS, PROPERTY ASSETS & SURPLUS INCOME
Group |
2012 €'000 |
2011 €'000 |
|---|---|---|
| Surplus income on loan repayments (in excess of loan carrying values) (Note 19) | 172,374 | 472,135 |
| Net profit on disposal of loans (Note 19) | 15,139 | 77,443 |
| Net profit on disposal of property assets | 714 | - |
| Total net profit on disposal of loans, property assets and surplus income | 188,227 | 549,578 |
During the year, the Group disposed of certain loans and receivables to third parties. Profit or loss on disposal is measured as the difference between proceeds of sale received and the carrying value of those loans and receivables. The Group realised net profits of €15m (2011: €77m) on the disposal of loans in the year. Profit on disposal of loans is not recognised where the overall debtor connection is impaired in accordance with the latest available impairment assessment data.
During the year, the Group sold certain trading property assets to third parties. Profit or loss on disposal is measured as the difference between proceeds of sale received and the carrying value of those property assets. The Group realised net profits of €0.7m (2011: €nil) on the disposal of trading property assets in the year.
For certain assets acquired, the proceeds from the disposal of the underlying collateral in a debtor connection has exceeded the carrying value of those loans and receivables. This surplus is recognised in the income statement as realised profits on loans. Of the total amount recognised €108m (2011: €55m) was generated from debtors who have fully repaid all NAMA debt and any further cash received is recognised as profit. A further €64m (2011: €417m) of surplus income is recognised on specific loan assets within a debtor connection where the cash generated and received by NAMA has exceeded the loan carrying value; and the estimated cash flows for the total debtor connection are greater than the total loan carrying values.
No loans were disposed of by the Agency.