Mr. Brendan McDonagh:

When NAMA was set up in 2009, there was a big concern that because the country did not have the money to buy the assets - the loans - off the banks, NAMA would have to issue Government-guaranteed IOUs to the banks to pay for them it would be on-balance sheet for EUROSTAT reporting purposes. As it happened at the time, France got an exemption because it set up a vehicle with majority private ownership but which was effectively state-controlled. It got an assets vehicle it used for dealing with the banking crisis off-balance sheet. We saw that and we worked with the Central Statistics Office, CSO, and applied to EUROSTAT and the Department of Finance to see if we could set up a similar vehicle in Ireland with majority private ownership but over which NAMA or the Minister effectively had a veto and so effectively it was State-controlled, similar to the French one, and if we could then get it off-balance sheet. They agreed we could, so when NAMA was set up originally it was capitalised with €100 million. Of that, €49 million was provided the Minister for Finance and €51 million was got from a number of pension fund managers here in Dublin, and effectively all they were entitled to was a dividend and their capital being returned to them once NAMA had paid off all its debts.

In 2020, as we had paid off all our debts, the Minister wanted a surplus out of NAMA. For us to get the surplus out of NAMA, we had to pay off the private investors. It was always intended we would pay them off. They were capped in terms of their return. For the €51 million they put in, they got €5 million in return for leaving their capital with us for as long as ten years and they got €56 million back. Once we paid back the €56 million after paying off all our debts, we could pay the €2 billion surplus or start paying our surplus, which was initially €2 billion, over to the Minister in 2020. It was purely a mechanism to keep NAMA off-balance sheet for EUROSTAT reporting purposes.