NAMA will help stabilise Northern Ireland property market, senior executive tells conference

NAMA, the National Asset Management Agency, will assist in the stabilisation of the property market in Northern Ireland, by providing liquidity to the market and by being able to take a longer term approach where necessary, Ronnie Hanna, Head of Credit and Risk with NAMA has stated. NAMA was established by the Irish Government to acquire and manage loans from five participating Irish banks which are linked to land and development or the debtors’ other loans associated with such land and development loans.

Speaking at the Northern Ireland Housing Sector Conference in Belfast today, Mr Hanna said: “NAMA is part of the solution to the current difficulties in the Northern Ireland market.” Mr Hanna told the conference that there are some misconceptions about NAMA and its role. “NAMA is an asset management vehicle and contrary to how it is portrayed in some quarters it is not a ‘toxic bank’. We have the capacity to take a longer term view of the loans we take on, if it makes commercial sense, and our timeframe is to manage and realise the loans and the property held as collateral for the loans over a 7 to 10 year time period.”

Mr Hanna said that NAMA’s financial return from the loans it acquires must take account of the cost of acquiring the loan, NAMA’s associated costs and its cost of capital. “NAMA has a neutral view on all markets including the Northern Ireland property market and we have no interest in hoarding assets longer than necessary. We will work with debtors if it makes commercial sense, but debtors must submit a business plan which includes a realistic repayment schedule and we require full co-operation and full disclosure from debtors. Debtor co-operation and capability is key,” he stated.

The nominal value of Northern Ireland loans that NAMA has acquired from some 180 debtors is £3.35 billion (€4 billion1) and this represents 5% of NAMA’s total loan portfolio, Mr Hanna said. Undeveloped land accounts for £2 billion (€2.4 billion) of NAMA’s Northern Ireland portfolio, investment properties £1 billion (€1.2 billion) and property and land under development £350 million (€400 million). Of the total £3.35 billion Northern Ireland portfolio, 60% represents land that is not under development, 29% represents commercial investments, 10% land under development and 1% residential development.

Mr Hanna said that just under one-third of NAMA’s loan portfolio by value is located in Belfast, 21% is in County Down, 19% in County Antrim, 8% in County Derry, 7% in County Tyrone, 7% in County Armagh, 4% in County Fermanagh and 2% in the city of Derry.

1 This does not include the sub €20m Land & Development loans of AIB and BOI