Under Section 41 of the Act, the NTMA provides NAMA with business and support services, including HR, IT, Market Risk analysis and the execution and processing of hedging transactions. NAMA reimburses to the NTMA the cost of these services which was €41m (including staff costs) in 2013.
By end-2013, NAMA had, through the NTMA, recruited over 331 staff with extensive experience and expertise in the areas of lending, property, accountancy, law, banking and credit. For any potential employee to be assigned to NAMA, the NTMA must ensure that the person meets the character standards set out in Section 42 of the Act, has no material conflict of interest and provides to the NTMA a statement of interests, assets and liabilities.
Five institutions (and their subsidiaries) were designated as PIs by the Minister in February 2010. On 1 July 2011, the business of Irish Nationwide Building Society transferred to Anglo Irish Bank and, on 14 October 2011, the combined entity changed its name to IBRC. EBS Building Society was acquired by AIB on 1 July 2011 and now operates as a subsidiary of AIB. The NAMA Units of the former Anglo and INBS were merged into one unit in 2012 as were the NAMA Units of AIB and EBS.
In February 2013, following the appointment of Special Liquidators to IBRC, NAMA invoked a clause in its Master Servicer agreement with Capita enabling the appointment of Capita as the back-up service provider to manage the IBRC NAMA loan portfolio. The transition of the NAMA portfolio from IBRC in Special Liquidation to Capita was planned to occur over three distinct phases. The first phase, transfer of the case management activities, took place in August 2013 and the second phase, the transfer of loan and treasury services, was completed in December 2013. The final phase – the transfer of IT services - is scheduled to complete by Q3 2014.
The two remaining PIs, AIB and BOI, and the new Service Provider, Capita, are required to apply best industry practice in their management of NAMA loans. They have established dedicated units to manage NAMA loans and they are required to ensure that these units operate on the basis of a segregation of staff, systems, data and infrastructure from other parts of the institution.
Under Section 131 of the Act, NAMA issued a Direction to each of the PIs setting out their detailed obligations in relation to the services they provide to NAMA. Similarly, in the case of Capita, these obligations were set out in the Capita Interim Operating Model Agreement ('Capita IOM').
The Direction and the Capita IOM cover such issues as governance structure and procedures, credit management procedures, customer relationship procedures, procedures for monitoring performance and procedures for reporting to, and working with, NAMA and the Master Servicer.
Regular Steering Committee meetings are held between NAMA and each PI and Service Provider to oversee service delivery and performance. NAMA has assigned teams of staff to each of the PIs and to Capita. The teams are based in the NAMA units within the PIs and Capita and have oversight of the management of NAMA debtors. In addition, the PIs and Capita are monitored by reference to performance indicators and they are required to meet or exceed pre-determined Service Levels.
Fees for services provided by the PIs to NAMA are calculated on the basis of the lower of 10 basis points (0.1%) of nominal loan value or actual costs incurred. In the case of Capita, the fee is based on the size of the loan portfolio under management. Aggregate service providers' fees payable in respect of 2013 was €54.8m; this was payment for the work of all staff employed by them to carry out loan administration and to manage NAMA's engagement with 563 debtor connections whose loans are not directly managed by NAMA.
Capita, in its capacity as Master Servicer, collates loan data and provides NAMA with consolidated financial and management information on its portfolio. A fee of €3m was paid to Capita, as Master Servicer, in respect of 2013.
From time to time, NAMA requires the assistance of specialist service providers in order to meet its statutory objective of obtaining the best achievable financial return for the State. A key criterion in the selection of service providers by NAMA is the extent to which they can provide value for money for the taxpayer.
NAMA as a contracting authority is subject to EU Directive 2004/18/EC as implemented in Ireland by the European Communities (Award of Public Authorities' Contracts) Regulations 2006 ('the Regulations'), in respect of the procurement of goods, works and services above certain value thresholds set by the EU.
Such tenders as they arise are advertised via the Irish Government and public sector procurement website www.etenders.gov.ie. The principles underpinning the Regulations are equal treatment, non-discrimination, mutual recognition, proportionality and transparency. Where the Regulations do not apply – either because the value of the procurement is below the EU Thresholds or falls outside of the Regulations – NAMA adopts a competitive process designed to obtain the best value for money that can be achieved. NAMA supports small and medium sized businesses in Ireland where that is possible without compromising its value for money principles.
A list of the tenders run via the etenders website and their results can be viewed on the NAMA website, www.nama.ie