‘Limited’ opportunity for Nama to build more affordable homes, says McGrath

There is only a “limited” opportunity for Nama to deliver any more affordable homes, the Finance Minister has said.

The National Asset Management Agency (Nama) is projected to return at least 4.9 billion euros to the Exchequer by the end of its wind down next year, according to Michael McGrath.

So far, the agency has transferred a total of 4.25 billion euros to the Exchequer, made up of 3.85 billion euros from its lifetime surplus and more than 400 million euros in corporation tax payments.

Speaking to the media on Wednesday, Mr McGrath said Nama, which was set up by the Irish government in 2009 after the financial crash, had been “very effective” in managing its loan portfolio and maximising value of its assets.

He said it had consistently generated profits over a 13-year period.

Mr McGrath said: “This strong commercial performance has exceeded expectations and Nama’s success has been augmented by the agency’s considerable achievements in relation to its supplemental objectives.

“Nama has facilitated the delivery of housing at significant scale – 34,000 new homes were funded or enabled by Nama by end-2023.

“Moreover, Nama made a major and long-lasting contribution to the regeneration of Dublin Docklands through the delivery of extensive new commercial and residential space.”

Asked about the agency’s capacity to deliver more affordable housing during its remaining operations, the minister said it would be “limited”.

He said Nama has a defined statutory mandate to maximise return while also contributing to other State objectives.

Mr McGrath said it would continue to look for opportunities to build more homes in its remaining portfolio.

However, he added: “Given that their overall portfolio is only about 1% of what it was at the peak – about 450 million euro – I think the further capacity to build more homes will be limited.”

Meanwhile, the minister provided an update on the special liquidation of the Irish Bank Resolution Corporation (IBRC), which was formed after Anglo Irish Bank was taken into State ownership.

He said the IBRC loan portfolio had a par value of 21 billion euros, consisting of more than 15,000 borrower groups and was supported by collateral based in 22 different jurisdictions worldwide.

In September last year, the remaining loan book had a par value of 3.6 billion euros.

The State had received approximately 1.7 billion euros from the special liquidation in respect of its unsecured creditor claims, interest on these claims, and its holding of the preference shares in the bank.

Any remaining funds left in the liquidation once all remaining tasks are completed will be returned to the State as the owner of the equity in the former bank.

The first surplus transfer of 35 million euros took place in December 2023.

Mr McGrath said it is now “timely” to make arrangements for Nama and the special liquidation of the IBRC to conclude their work.

The liquidation of the IBRC is expected to “substantially conclude” by the end of this year, according to the minister.

Remaining activity and assets will then be transferred to Nama, which itself is taking steps to wind down by the end of 2025.

A “resolution unit” has been established to manage likely “residual activity” from both entities after that deadline.

It will be resourced by the National Treasury Management Agency.