The National Management Agency is continuing to collect rent arrears from debtors connected with Irish Bank Resolution Corporation as a result of the Government's decision to liquidate the bank in February of this year.
Before February, Nama had outsourced to IBRC the management of loans with a face value of €38 billion and loans to more than 300 debtors totalling about €1.3 billion. In its annual statement for 2014, which was submitted to the minister for finance Michael Noonan in September and made public last night, Nama said that it had "experienced an unexpected disruption" to its cash collection activities from IBRC following the dramatic liquidation of the bank.
“The bank and loan accounts of IBRC were frozen by the Central Bank and standing orders were blocked,” Nama’s report to the minister states. “Work is ongoing in respect of putting in place new rental payment structures in new banks and the collection of any outstanding cash due to Nama.”
In March, Nama appointed Capita Asset Services as primary servicer of its IBRC loans. This work was previously managed on its behalf by IBRC staff.
The agency said it is currently seeking to hire 40 additional staff to service the IBRC portfolio alongside Capita.
Residual loans
Nama is slated to acquire any residual IBRC loans that the bank's special liquidators at KPMG are unable to sell by the year end.
The agency said that in addition to outsourcing the management of this portfolio to outside providers, it also expects to hire between 180 to 220 staff for this work.
Nama said it is “envisaged that much” of next year will be taken up with managing the transfer of the IBRC loan portfolio and developing a strategy to manage the debtor connections.
Operating profit
Nama's accounts for the first half of this year, which are unaudited, show that it made an operating profit of €500.9 million but incurred impairment charges on its loans of €385.3 million.
Its cumulative impairment charge now stands at €3.6 billion. Nama said the carrying value of its acquired loan portfolio was €21.3 million at he end of June, net of impairments. This was down from €22.8 billion at the end of December 2012.
The agency had a tax charge of €60.9 million in the first half of this year and paid a dividend of €2.1 million to its private investors to leave it with a profit for the six-month period of €52.5 million.
Nama said it generated €2 billion in cash in the first six months of the year and had €3.4 billion in cash balances on June 30th.
It redeemed €1.5 billion of senior bonds in June and is on target to have repaid €7.5 billion of these bonds by the year end. It expects to repay an additional €7.5 billion between 2014 and 2016.
The Nama documents state that it expects direct operating costs to reduce to €137 million next year from €140 million in 2013. Legal fees are forecast to reduce by €2 million to €11 million in 2014.
The state agency said it had approved 237 applications for rent abatements by the end of June, with an aggregate annual value of €14 million.
