FINANCIER DERMOT Desmond has said that he opposes the State taking control of the banks’ risky property loans through the National Asset Management Agency (Nama) under the Government’s “bad bank” plan.
In an interview with radio station Newstalk, Mr Desmond said he would prefer to see the loans isolated within the banks and resolved over time, with the Nama acting as a “co-ordinating” and regulatory body.
He could not support an entity “where it’s impossible to value the assets”. He did not know how values could be agreed as there were no markets.
The economy would be “in dire straits for several decades” if the banks were nationalised, he said.
The businessman, who owns 1 per cent of the shares in Bank of Ireland and 0.6 per cent of Allied Irish Banks (AIB), said the banks could make enough profits over the next five years to cover any property losses over that time without Government intervention.
“Let’s just park it and freeze everything, without gain or loss to anybody, until we know there is a market and then determine what the [loan] write-offs are,” he said.
He said that the size of the write-offs would determine the Government’s stake in the two big banks.
“If the Government says that €3.5 billion, under a stress test, is okay for Bank of Ireland and €5 billion is okay for AIB, you would imagine that there should be no further write-downs,” he said.
Mr Desmond said he had no difficulty if Nama monitored development loans on “an ordered basis” so property values were maximised. “If it becomes an operational body with a lot of executive staff, it will be a big mistake.”
It would become “a millstone around our necks”.
Banks would only start lending to small and medium-sized businesses, he said, when they had “proper business cases to put forward and that will only come with an improvement in the economy”.
He did not think the State needed outside financial support and that the global economy would stabilise in 2012 and 2013.
He declined to say how he would vote at AIB’s egm next month to approve the Government’s €3.5 billion investment into the bank.
He said he opposed the appointment of Richie Boucher as chief executive at Bank of Ireland because he had approved some of the bank’s loans to developers.
“I can’t agree with somebody that has participated in that little circle of decision-making being promoted by that same circle.”
Mr Desmond said that we had lost “our confidence as a nation” but Brian Cowen and Brian Lenihan had the “capability to get us out of this financial mess.”
He called for a “national economic think-tank to bring the best brains in the country together”.
He said Scottish football club Celtic, where he is the largest stakeholder, could join the English Premier League within 10 years.
Mr Desmond was ranked fourth richest person in Ireland with a fortune worth €1.6 billion in the latest Sunday Times rich list, a decline of 11 per cent on last year.
Queried about the accuracy of the figures, the financier said: “If I was only down 11 per cent, I’d be delighted.”
Asked how he got his trademark moustache, Mr Desmond said he grew a beard while working for the World Bank in Afghanistan in 1979 to stop being mistaken for a Russian, as locals spat at him.
He later shaved the beard, as it was itchy, but kept the moustache.
