NAMA – Loan Service Providers

As part of the Government’s decision on 7th February 2013 to appoint Special Liquidators to IBRC, it was decided that the National Asset Management Agency (NAMA) would acquire those loans which have not been sold after the Special Liquidators have completed their current valuation and sales process. It is expected that IBRC loans will be acquired from the Special Liquidator on a phased basis. Under the IBRC Act 2013, loans to employees, ex-employees and former directors of IBRC will not be acquired by NAMA. NAMA has established a special purpose vehicle (National Asset Resolution Ltd – NARL) to acquire and manage IBRC loans following completion of the loan valuation and sales process.  

Following decisions by its Board, NAMA today announces its plans in relation to (1) the existing loans being managed by the Special Liquidators/IBRC on its behalf and acquired under the NAMA Act 2009 (the current portfolio) and (2) any new loans to be acquired from the Special Liquidators later in the year under the IBRC Act 2013. 

(1)  Current portfolio

NAMA plans to appoint Capita Asset Services as its primary and special loan servicer (please see Notes at the end of this statement) on the NAMA loans which are currently being managed on its behalf by the Special Liquidators/IBRC. Capita is currently contracted as Master Servicer  (please see the Note at the end of this statement) to NAMA and the contract includes an option for NAMA to deploy Capita as a back-up loan servicer. The Special Liquidators/IBRC currently provides primary servicing for NAMA loans with nominal balances of €41 billion. For €5.1 billion of this, the Special Liquidators/IBRC also provides special servicing in the management of over 300 debtors under a framework of delegated authority from NAMA.

(2)  New loans

NAMA will today publish, on the www.etenders.gov.ie website, a Request for Proposals (RFP) seeking two service providers to take over primary and special loan servicing on two distinct types of loans that may be acquired by NAMA under IBRC Act 2013 after completion of the loan sales process currently being conducted by KPMG, the Special Liquidators of IBRC:

  • Commercial property loans, residential investment and development loans and business banking loans (referred to asPortfolio A in the RFP); and
  • Personal loans, principally residential mortgage loans (referred to as Portfolio B in the RFP)

It is envisaged that NAMA, which plans to recruit staff from IBRC, will operate in close conjunction with the service providers for both Portfolio A and Portfolio B, including providing them with credit, legal, treasury, finance and accounting services.

The deadline for receipt of tenders is Tuesday, 30th April 2013 and, following an evaluation, it is expected that the two service providers will be appointed within two months of that date.

It is envisaged that, by the time the transition to the new arrangements has fully completed later in the year, a significant number of relevant IBRC employees will be employed by one or other of NAMA [Staff will be employed by NTMA and assigned to NAMA], Capita or the new loan servicers. As it is not yet clear what proportion of the current IBRC portfolio (New Loans) will transfer to NAMA, given that the Special Liquidators’ sales process has not concluded, it is not possible to provide estimates of the employee numbers that will be involved in the new arrangements being put in place by NAMA. As with the current NAMA portfolio acquired under the 2009 NAMA Act, a major objective will be to manage the incoming portfolio to be acquired under IBRC Act 2013 in a cost-effective and efficient manner on behalf of the taxpayer.

NOTES:

  • Primary servicing,also known as loan administration services, comprises the administrative and operational activities associated with the management of loans, including the processing and charging of loan interest and fees.
  • Special servicing is also known as case management or relationship management and involves on-going interaction with debtors and the assets securing their loans with the objective of maximising the cash realised from loans and assets.  
  • Master servicing involves the collation of detailed loan information from the three participating institutions so as to facilitate NAMA financial and management reporting