Oireachtas Joint and Select Committees
Wednesday, 25 March 2026
Joint Oireachtas Committee on Finance, Public Expenditure, Public Service Reform and Digitalisation, and Taoiseach
General Scheme of the National Treasury Management Agency (Miscellaneous Provisions) Bill 2026: Discussion
2:00 am
Mairéad Farrell (Galway West, Sinn Fein)
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Níl aon leithscéal faighte againn. We have received no apologies. Is mian liom na riachtanais bhunreachtúla seo a leanas a mheabhrú do chomhaltaí agus páirt á glacadh acu i gcruinnithe poiblí. Caithfidh comhaltaí a bheith i láthair go fisiciúil laistigh de theorainneacha shuíomh Theach Laighean. Ní cheadóidh mé do chomhaltaí páirt a ghlacadh i gcruinnithe poiblí nuair nach bhfuil siad ag cloí leis an riachtanas bunreachtúil seo. Mar sin, má dhéanann aon chomhalta iarracht páirt a ghlacadh ó lasmuigh den suíomh, iarrfaidh mé orthu an cruinniú a fhágáil. Maidir leis seo, iarraim ar chomhaltaí a dheimhniú go bhfuil siad i láthair laistigh de phurlán Theach Laighean sula ndéanann siad aon ionchur sa chruinniú ar MS Teams.
Fiafraítear de chomhaltaí cleachtadh parlaiminte a urramú, nár chóir, más féidir, daoine nó eintiteas a cháineadh ná líomhaintí a dhéanamh ina n-aghaidh ná tuairimí a thabhairt maidir leo ina ainm, ina hainm nó ina n-ainmneacha nó ar shlí a bhféadfaí iad a aithint. Chomh maith leis sin, fiafraítear díobh gan aon rud a rá a d’fhéadfaí breathnú air mar ábhar díobhálach do dhea-chlú aon duine nó eintiteas. Mar sin, dá bhféadfadh a ráitis a bheith clúmhillteach do dhuine nó d'eintiteas aitheanta, ordóidh mé dóibh éirí as an ráiteas láithreach. Tá sé ríthábhachtach go ngéillfidh siad don ordú sin láithreach.
I wish to advise members of the constitutional requirement that they must be physically present within the confines of the Leinster House complex in order to participate in public meetings. I will not permit a member to participate where they are not adhering to this constitutional requirement. Therefore, a member who attempts to participate from outside the precincts will be asked to leave the meeting. In this regard, I ask any member participating via MS Teams that, prior to making a contribution to the meeting, they confirm they are on the grounds of the Leinster House campus.
Members are reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of a person or entity. If their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with any such direction.
To give context for today's meeting, the committee is meeting today to discuss the topic of pre-legislative scrutiny of the National Treasury Management Agency (miscellaneous provisions) Bill 2026. This legislation will provide the legislative basis for the proposed special liquidation of the Irish Bank Resolution Corporation and the dissolution of the National Asset Management Agency. I welcome Mr. Brendan McDonagh, chief executive officer of the National Asset Management Agency, to the meeting. I invite him to make his opening statement.
Mr. Brendan McDonagh:
I thank the Chair. The committee has invited me here today as it considers the general scheme of the National Treasury Management Agency (miscellaneous provisions) Bill 2026. As CEO of the National Asset Management Agency, NAMA, I am happy to assist the committee on NAMA matters that may provide useful insights to members as they commence their deliberations over the coming weeks. I welcome the committee's consideration of the Bill at this stage. I advise that, while I am aware of what is contained in the Bill generally as it pertains to NAMA, I was not involved in the drafting of the Bill.
NAMA substantially completed its wind-down in December 2025 in anticipation of our dissolution. We are ready for NAMA to be dissolved but we continue to deal with any remaining assets and litigation until dissolution date. Any remaining activities at dissolution date will transfer to the proposed resolution unit within the National Treasury Management Agency, NTMA. I will briefly touch on some of the key steps achieved in 2025 and give the committee an overview of where we stand close to dissolution.
In December 2025, we completed a transfer of €450 million in cash to the Exchequer. Property assets with a value of €425 million were also transferred to the Land Development Agency, LDA, during 2025, bringing total transfers of cash and assets from NAMA to the State to €5.6 billion during its lifetime, and €875 million in 2025 alone. The transfer to the LDA included national asset residential property services, NARPS, our social housing vehicle of 1,366 homes. It also included two prime residential development sites, one in Dublin and one in Kildare, sites which the LDA believes can deliver at least 7,000 new homes once planning is obtained.
The year 2025 also saw us increase our total lifetime contribution to the Exchequer to €5.6 billion, an increase of €400 million during the year. When we add that to the €5.6 billion NAMA provided in state aid, which was an overpayment, to the five participating institutions as part of the loan acquisition process and which we have recouped in full, that brings the total benefit to the State arising from the agency to €11.2 billion. Our residential delivery programme completed in 2025, bringing delivery to over 44,500 new homes, with 14,660 directly delivered, an important contribution at a time of pressing housing need. Similarly, our transformation work in the Dublin docklands strategic development zone, SDZ, is there for everyone to see.
We succeeded in implementing our deleveraging programme, managing a portfolio of loans from its value at inception of €32 billion. Entering 2026, our balance sheet included a loan portfolio with assets valued in the region of €46 million, down from €100 million a year earlier. Since January 2026, the value of the portfolio has fallen to around €30 million. Unfinished activity at NAMA’s dissolution is likely to relate to ongoing litigation, the sale of one remaining foreign-based asset and claims in bankruptcies and liquidations. The timing of the resolution of these activities is outside of the hands of NAMA.
In regard to the ongoing and unresolved legal cases, this is another key workstream for us and has resulted in significant progress over the last 12 months. We are continuing to manage seven remaining litigation cases, six cases in which NAMA has a direct involvement and one dormant case that has not progressed in the last 12 months. NAMA’s approach is to manage each litigation case with a view to obtaining the best achievable outcome for the taxpayer. If these cases can be resolved on terms that meet this objective before the dissolution, we will do so. However, in cases where this cannot be achieved, they will likely go through a court case and responsibility for managing the cases to a conclusion will transfer to the NTMA resolution unit.
Turning to the general scheme, which is the focus of the discussion today, I see three principal components: Part 2, which provides for the dissolution of NAMA; Part 3, which facilitates the transfer of residual activity from the Irish Bank Resolution Corporation, IBRC, special liquidation to the NTMA; and Part 4, which sets out additional functions and powers for the NTMA in managing the remaining matters of both IBRC and NAMA.
With respect to Part 2, which concerns NAMA, its purpose is very straightforward. It provides for NAMA’s dissolution and for the transfer of NAMA’s assets and liabilities to the NTMA.
It also ensures continuity by maintaining contractual positions and designating all NAMA records as NTMA records. The Part addresses various operational requirements, including arrangements for the approval of the latest set of financial statements. In essence, it mirrors the approach taken in other legislation governing the dissolution or merger of State bodies.
My team has contributed to Part 4, drawing on the experience of NAMA’s strategy, functions and powers to identify those that may be required by the NTMA in managing any residual NAMA matters. Part 3 is a matter for the NTMA and the Irish Bank Resolution Corporation, IBRC.
In conclusion, as we approach NAMA’s dissolution, we are fully prepared for this last step. Over the last year, we completed major elements of the wind-down, transferred substantial cash and assets to the State and continued to deliver substantial value to the State. While a small number of legal residual matters will most likely naturally continue beyond our closure, what remains is limited and well-managed and will transfer smoothly to the resolution unit within the NTMA. Until that time, our focus will be on extracting as much value as possible from the residual portfolio with a view to ensuring that any residual activity to be transferred is minimised. I thank the Cathaoirleach.
Mairéad Farrell (Galway West, Sinn Fein)
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Gabhaim buíochas le Mr. McDonagh as sin. We will now open the meeting to the floor.
Shay Brennan (Dublin Rathdown, Fianna Fail)
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Mr. McDonagh is very welcome. I thank him for joining us, particularly on such short notice. I have a couple of technical questions regarding the transfer, and then a broader question to wrap up. When is the target dissolution date? Is the legislation the last piece and only remaining bar to the transfer? Is everything ready to go beyond that? As soon as the legislation is passed, the Minister can assign the dissolution date, with a relatively short run-in. Is that right?
Mr. Brendan McDonagh:
Yes, the Deputy is correct. The last bit is just to pass the legislation, which is this Bill. That will then allow the Minister to issue an order to set the dissolution date. If, for argument’s sake, this legislation was passed by the Houses today, the Minister could issue an order tomorrow to wind it up next week. We have got everything lined up to go. Effectively, it is in-house because we are all part of the NTMA. There is no obstacle to it happening very quickly.
Shay Brennan (Dublin Rathdown, Fianna Fail)
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In relation to staffing, we talked the last time about staff transferring to the resolution unit. I understand that legislation might not be required to do that. Are they all going to the resolution unit? Is there any plan to transfer any staff to the Land Development Agency, LDA? That would seem to make sense, given that certain elements of the residual portfolio are going to the LDA.
Mr. Brendan McDonagh:
No. The major assets already went to the LDA last year, in terms of national asset residential property services, NARPS, and two major residential development sites. The NTMA is the employer, and it has always been the employer in terms of staff assigned to NAMA. The NTMA has gone through a process, and it has already identified eight people who remain in NAMA. At this stage, we are down to 13 people in NAMA. More people will be leaving next week, at the end of March. Effectively, then, by the end of April, it will be down to the eight other people and me. Those eight people are going to the NTMA resolution unit, but I am not.
Shay Brennan (Dublin Rathdown, Fianna Fail)
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I might cut this short, because I am required to vote.
Mairéad Farrell (Galway West, Sinn Fein)
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We can let the Deputy come back in at another point, because he has to go to vote. I call Deputy Colm Burke.
Colm Burke (Cork North-Central, Fine Gael)
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I would like to get some clarification because it has been so long ago since this started. When the State initially made a contribution to the banks, what was the total cost of that at that stage when NAMA was established?
Mr. Brendan McDonagh:
When NAMA bought the loans from the banks at that stage, we paid the banks almost €32 billion.
Colm Burke (Cork North-Central, Fine Gael)
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NAMA took over the €32 billion in loans. From that €32 billion, what have we actually recovered?
Colm Burke (Cork North-Central, Fine Gael)
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In real terms, I think it was €75 billion.
Mr. Brendan McDonagh:
Well, it was €74 billion that people had borrowed. We paid the banks €32 billion for it. If the Deputy recalls, the loans were only worth €26.2 billion, so we overpaid the banks by, coincidentally, €5.6 billion on day one. We recovered that €5.6 billion to get back to €32 billion. We also have a profit, after paying all our costs and things like that, of €5.6 billion.
Colm Burke (Cork North-Central, Fine Gael)
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So there is a net loss when we take into account what the State got and what the banks lost. The net loss was in the order of around-----
Mr. Brendan McDonagh:
There were a number of things in terms of why the State got involved. If we limit it purely to NAMA, then, effectively, the banks took the losses of €40 billion on the transfer on day one. As we all know, they then had to be recapitalised on the back of that. The Comptroller and Auditor General does a report every year, which I think is his annual report, where he sets out the net cost, even after the State selling its remaining stakes in the Bank of Ireland, AIB and Permanent TSB. It works out what the net cost to the State is after the whole banking recapitalisation process. Purely in relation to what NAMA did, which I am responsible for, I am glad to say we made a €5.6 billion profit on the portfolio we acquired.
Colm Burke (Cork North-Central, Fine Gael)
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Looking back on the way NAMA managed what it took over, and it was a difficult time for everyone, is there a view that perhaps items were sold off too early, and if more time had been given, we would have got back a better return than from offloading them at a very early stage?
Mr. Brendan McDonagh:
Listen, this is often said, but I will explain one of the things we did at the very start, very intentionally and strategically. Of the portfolio, 36% was in the UK and the UK market recovered very quickly, from 2010 onwards. We sold mainly overseas assets, mainly in the UK, in the early years. We had only sold assets worth about €1 billion in Ireland by the end of 2012, because the recovery really started to happen from 2013 onwards. What people sometimes forget when they say we sold this stuff in 2012 and that perhaps we should have held onto it is that we had only sold €1 billion worth of assets in Ireland by 2012. People also forget we sold a lot of assets in Ireland from 2017 onwards, and a lot of those assets, which we got very good prices for at the time we sold them, are now sometimes being resold into the market at about 50% of their value. We have got to look at this in the round. People always concentrate on one aspect and say we sold those assets too early in the early stage of NAMA, but in the late stage of NAMA, we got huge prices for assets, and the recovery has only been 50%.
Colm Burke (Cork North-Central, Fine Gael)
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Looking at this issue in relation to what has occurred and how NAMA has now treated the management, we still have a problem here in Ireland with the number of banks operating here because of what occurred back in 2007-08. A number of international banks pulled out of Ireland, so we are now talking about a very small group of institutions being available for anyone to get finance from. Is there any way this can be changed? We have proved that the economy has recovered and the banking sector is well supervised, but there still seems to be a reluctance for international banks to come back into the Irish market.
Mr. Brendan McDonagh:
By their nature, international banks have the option of operating in any country. I do not think the situation is unusual because many banks retreated into their own markets after the 2007–08 crisis. Even a lot of the German banks that were operating in a number of different countries retreated back home. A number of them ended up being closed.
The Deputy is right that the economy is performing very well. I agree with him, however, that it is better to have more rather than less competition. If we could get more institutions to enter the market, it would be a lot better. We would certainly hear it said, and I am sure the Deputy has heard it said, that people are trying to borrow money from the two main banks, AIB and Bank of Ireland, and find it very difficult. People might want to borrow perhaps 70% of something, and the banks are only prepared to give 40% or 50% of the funds. How do people bridge that gap? I think competition is there, but all banks the world over are conscious of the fact that there is more regulation now, thankfully, than there was in the mid-2000s.
The day you lend money should also be the day you start worrying about getting your money back. It has to be lent on a prudent basis. There would be more competition here if we had the likes of Ulster Bank and KBC here, which have both left the country, or Bank of Scotland Ireland which also closed down and left the country. Maybe the way to look at it is that we were overbanked during the Celtic tiger, which led to massive risk-taking. Maybe now we have gone too much to the other extreme. Banks will naturally go anywhere they can make money. If the economy is performing well that is the best option for getting more competition.
Colm Burke (Cork North-Central, Fine Gael)
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With regard to the seven High Court actions, one of them has moved. Are these cases in which claims are being made against NAMA or is NAMA making claims against third parties?
Mr. Brendan McDonagh:
Deputy Burke is right that there are seven cases and one is dormant. Of the six, three involve people pursuing claims against NAMA and we have to defend them very vigorously. We do not think there is much merit to them but the people taking the claims think there is and they are pursuing them. There are three other cases where we are pursuing debtors where we believe they have assets. In all conscience I cannot walk away from somebody in that case. I do not think it is fair to the debtors whom we chase down for assets and who voluntarily co-operate with us to let these three people off the hook if I believe they have assets. It is not a huge amount of money, to be honest, in terms of the three cases but it is a point of principle that we have to treat everybody the same. These three people think that because NAMA has gone out of business they will not be pursued but I can say today those three cases will be pursued by the NTMA post-NAMA and this is the right thing to do. I encourage these people to come forward to try to settle with us if they can as it would make sense for everyone but I cannot control what people do. We will hold firm; if we think somebody has assets it is only fair that they would contribute towards their loan obligations.
Shay Brennan (Dublin Rathdown, Fianna Fail)
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I was going to ask a question, which we probably know the answer to, on planning for the 7,000 units. This was asked about the last time Mr. McDonagh was before the committee. He has said it has already transferred to the LDA.
Mr. Brendan McDonagh:
It transferred to the LDA. The last time we were here we discussed that we think one of the sites has the potential for more than 1,000 residential units. We had submitted a planning application and An Bord Pleanála had not determined the outcome of it by the time we transferred it to the LDA. Since then the planning application has been rejected and the LDA must revise it and go back to it, which I understand it intends to do. With regard to the other site in north Dublin, Fingal County Council has a bit of work to do, which it has committed to do, in terms of the overall county development plan. Part of the site will be immunised for the metro. TII is also in discussions on this. It is probably a longer-term play. With regard to both sites the chief executive of the LDA, John Coleman, has indicated he hopes to get more than 1,000 units, possibly 1,200 units, in Celbridge. At the site in north Dublin he hopes to get perhaps close to 6,000 units when Fingal County Council and TII resolve the issue with the metro.
Shay Brennan (Dublin Rathdown, Fianna Fail)
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I thank Mr. McDonagh for the update. What structure will the resolution unit take in the NTMA? How long is it likely to be in existence? Are we talking about a couple of years? Is it something that will have just one job to do after which it will wind down?
Mr. Brendan McDonagh:
The people who have moved to the resolution unit in the NTMA have been offered a two-year contract. Looking at where the portfolio is today, we would hope the majority of the work could be done in two years. I will not speak for the NTMA because it will speak for itself to the committee and will not appreciate me talking about it. From my point of view, we will probably start with eight people and as things get done and completed the number will fall off. With regard to the tail-end of asset management companies such as NAMA, and especially those in Scandinavia which started in the mid-1990s, some of them were going for 15 years afterwards with one or two people because of litigation. People who were litigating kept doing so and the company needed to have some corporate memory to manage the litigation. I hope this is not the case for NAMA when it goes into the NTMA resolution unit. If I were looking at it totally objectively, hoping that litigation can be resolved and the remaining assets can be resolved, I would anticipate that within two years there is a good possibility that the resolution unit could have completed its work, all going well.
Shay Brennan (Dublin Rathdown, Fianna Fail)
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This effectively draws a line under NAMA and brings to an end a long-running operation. At that time it was being set up there was a lot of speculation as to what it could achieve and what the likely outcome would be. The results are there now and they are clear for everybody to see. Looking back over Mr. McDonagh's time there and back to NAMA's inception, would he change anything in the set-up, the structure or the legislation that provided for it?
Mr. Brendan McDonagh:
Looking back on it, the legislation has served NAMA very well. When people look at this they cannot just look at the legislation. Ireland was one of the first countries to set up an asset management company, long before Spain and other European countries. One of the big things that happened was that we had a very difficult engagement with the European Commission to try to get approval for NAMA. In fairness, it was trying to protect the market at the end of the day. Effectively, NAMA had to operate similarly to any other financial institution that would operate in the market. In the scheme of things, it probably served us well. I also think that when other countries formed resolution units the European Commission was a bit more flexible.
I have said to this committee or the Committee of Public Accounts that when Ireland went into a bailout in 2010 I used to have to attend quarterly meetings with the troika when it came to town. I can honestly say that those meetings were similar to attending here or the Committee of Public Accounts. They were probably even rougher than that, to be honest. They really put us and Ireland under huge pressure to get NAMA wrapped up a lot quicker. They tried to set very stringent targets for us. Basically what was happening was that Ireland did not have the money to pay for it. We had issued bonds to the banks and those bonds were being brought to the ECB. The ECB was lending money against these bonds to the banks to keep them going for funding. It did not like that.
It was when Mario Draghi headed up the European Central Bank and said in the famous speech in 2012 that it would do whatever it takes that the attitude changed. To be fair to the troika, it was not the European Commission or the IMF that was being difficult; it was the ECB which was the most difficult at those meetings. By 2012, when Mr. Draghi made that speech and it could be seen that other countries also had lots of banking problems, it did change the rhetoric and the landscape. We were sticking to the long-term plan that we wanted to get finished by 2020. We did not want to be selling all of the assets at fire-sale prices then. There used to be skin and hair flying at those meetings, where we would argue our position and it would argue its position.
In the scheme of things, a thing that happens when a country has economic problems is that trying to do things too quickly is the wrong way to go. The country has to average its way out of a problem. If it has a problem, just fire-selling assets is not the solution. That is something we resisted strongly. It was a lesson learned and we performed well on that but it was not easy.
Cian O'Callaghan (Dublin Bay North, Social Democrats)
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Gabhaim buíochas leis an bhfinné as teacht os comhair an choiste.. On the issue of the value of the return on assets, Mr. McDonagh has clearly expressed a view that he is satisfied it was a good outcome. How is that independently verified or assessed?
Mr. Brendan McDonagh:
It is assessed every year. We get our accounts audited and signed off by the Comptroller and Auditor General. In addition, every three years the Comptroller and Auditor General does a triennial report on the performance of NAMA against its objectives and publishes it. He has just completed what probably is his last report on NAMA. It is with the Minister who has to bring it to the Government and it will probably be published. It has to be published within 90 days of submission. That is all I can say about it. It goes through every aspect of NAMA and says how we performed against each of our objectives.
We also commissioned Professor John FitzGerald to do an independent report on NAMA a few months ago and he had no restrictions on him. He could assess us and he produced an independent report assessing NAMA. He drew on his experience and contacts with other asset management companies and said NAMA has performed well and in line with its objectives. That report is available on our website. The Deputy is right that no one is going to take my word for it in terms of what I think. However, other independent observers can make assessments of what NAMA did.
People often confuse things and say NAMA should have done this or that, but the legislation, which is what the chief executive and board of NAMA have to abide by, was about realising the assets and getting the best achievable return. People say we should have done other things but they were not in our legislation. The Oireachtas and Government always had the opportunity, if they wanted to, to change NAMA's legislation to make it do other things and chose not to. I cannot be responsible for that. It is just a fact.
Cian O'Callaghan (Dublin Bay North, Social Democrats)
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Does Mr. McDonagh have an idea of the quantity of land or number of sites NAMA had involvement with that are now with the Land Development Agency, LDA, for different projects? Does he have any insight into that?
Mr. Brendan McDonagh:
As I said, we gave two major sites, or were directed to transfer them, to the LDA, which could deliver about 7,000 units. The LDA is also working with developers who were formerly in NAMA who are delivering houses on sites which were formerly secured in NAMA. I do not have the detail of those, but I know in general terms what sites it is involved in. At the end of the day, it is a matter for the LDA. I am not involved in the LDA, but it is working with a lot of developers who went through the NAMA process.
Cian O'Callaghan (Dublin Bay North, Social Democrats)
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It is correct that the LDA is developing homes on several sites that NAMA used to have.
Cian O'Callaghan (Dublin Bay North, Social Democrats)
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Some of them are quite significant sites.
Cian O'Callaghan (Dublin Bay North, Social Democrats)
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We have a very serious housing crisis and it is taking some of those sites a long time. Some of them are getting built out now and providing much needed homes, but there was approximately a 15-year period for which construction activity just stopped in those areas. The loans were transferred to NAMA and now, only at this point, are some of those sites getting built out. Nothing in housing happens very quickly but 15 years is a long period and it has contributed to the housing problem we have. Does Mr. McDonagh have any views on the timescales for delivery or on the mandate NAMA was given by the Government and Oireachtas, which Mr. McDonagh referenced? If NAMA had been given a different mandate or shape, could some of those homes been delivered more quickly?
Mr. Brendan McDonagh:
That is a very difficult question to answer because some of the sites that came into NAMA had the wrong type of planning permission and were not viable to develop. People forget that until probably the start of 2014 - and it is hard to believe now - the cost of building a unit was more than what it could be sold for. Between 2010 and 2013, when many of these developers were in NAMA they would not have been able to build on those sites. Due to the European Commission rules on state aid, we could not have lent money to someone to build something that would lose money either. These are the restrictions I talk about.
From 2014 onwards, as people were re-financing themselves out of NAMA or getting back into building activity as we were funding them - as I said, we were involved in 44,500 homes since 2015 - we did what we could to help these people out by lending them money to get planning permission for these sites. We were also funding people who wanted to build houses that could make money while they were in NAMA and, as prices went up, some of them managed to re-finance themselves out of NAMA and get back into what we call the normal banking system.
One of the things that surprises me is that planning has been quite difficult. We all know there are a lot of issues going on with planning, but, of the sites we funded to go through the planning system since 2014, less than 60% finally achieved planning permission. About 40% of them did not achieve planning permission for various reasons. Sometimes it was developer problems, that they were looking for too much and the local authority would not allow them to do, but other times, the developers submitted very good plans and they were objected to or judicially reviewed or whatever the case was, and people had to go back into the planning system.
Housing is something that will be here forever. It will be a problem that will constantly have to be dealt with, but clearly anything that can improve the number of houses being built in the system, given the demand, has to be welcomed. There is a severe shortage of housing.
Cian O'Callaghan (Dublin Bay North, Social Democrats)
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I have two specific questions about Mr. McDonagh's opening statement and the pre-legislative scrutiny of the legislation, but first I will make a quick comment. In my constituency, a significant site is now being built out by the LDA. The loans of the previous developer were transferred to NAMA. Nothing happened there for 15 years. Multiple planning permissions were granted. Private developers would have said it was not viable and all the rest, but under the cost-rental and affordable model and the LDA, those homes are now being built. If we had arrived at that much faster, rather than over a 15-year period, those much-needed homes might have been built more quickly. It is an example of the LDA being able to deliver where the private sector was never able to, notwithstanding the different pressures they have.
In his opening statement, Mr. McDonagh said he was not involved in the drafting of the Bill. Did he have any input into the Bill or was there any kind of consultation or engagement with him about it? I understand he was not involved in drafting it.
Mr. Brendan McDonagh:
No, I was not involved in drafting it.
I will not really go through it but it is not a complicated Bill. There are mainly technical legal aspects in the Bill. The former NAMA chief legal officer, who left at the end of February, was involved with working with the Department of Finance to help it ensure it had the applicable provisions that were in the NAMA Act, which would be repealed in full, in this Bill so that the resolution unit would have sufficient powers to be able to manage the remaining parts of what transfers into the resolution unit.
The chief legal officer would have asked me do we think we need this and do we think we need that. I am being upfront with the Deputy here but in terms of the question on whether I was involved in meetings with the Department of Finance or the Attorney General's Office, I was not. As I said, I know what it is in the Bill because I had lots of discussions with my chief legal officer before he left. I am not a liar. At the end of the day, I tried to make sure, as any good citizen or somebody in a senior public position would, that what was handed over was fit for purpose.
Cian O'Callaghan (Dublin Bay North, Social Democrats)
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I thank Mr. McDonagh. I just wanted to understand what level of input he had. In Mr. McDonagh's view, given that it is pre-legislative scrutiny of this Bill, are there any issues in it that he thinks we need to probe further or need further consideration?
Mr. Brendan McDonagh:
No. It is a much simpler Bill now. The original Bill provided that IBRC would transfer into NAMA and would subsequently transfer when NAMA was wound up into the NTMA resolution unit. As a result of the passage of time since the Bill was originally written, IBRC have made progress and sold all of the assets, as far as I understand. It is down to a couple of litigation cases is what I am hearing. I am not formally involved. Effectively, everything has become much simpler because of the managing down IBRC and because of the managing down of NAMA. The board of NAMA and I had the foot on the pedal for the past two years to make sure NAMA would be as small as possible when it went to the resolution unit. We have achieved that.
I can honestly say I am not aware of anything suggesting any deficiencies in the Bill as provided. If there was, believe me, I would have spoken up and told my chief legal officer to make sure that was raised with the Department of Finance or the Attorney General's Office. That is my position on it.
Cian O'Callaghan (Dublin Bay North, Social Democrats)
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I thank Mr. McDonagh.
Edward Timmins (Wicklow, Fine Gael)
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I thank Mr. McDonagh for his opening statement. I think he might have been the first witness before this committee last May. I remember trying to pick his brains at the time for solutions. I will talk generally today on specifics. Mr. McDonagh came up with an acronym, FELIPE. Ten months on from that day of 21 May, does Mr. McDonagh still hold by that acronym? It is very important. Would Mr. McDonagh update that acronym? Would he leave it as is or is there anything he thinks should be different following the intervening period?
Mr. Brendan McDonagh:
No. I thought about that before I came in because I thought I could be asked about that even though that is a different aspect of what is in front of us now. It is the same issues that need to be resolved. It is open to other people to say you could add on a few other letters onto it if they want but I have been involved-----
Edward Timmins (Wicklow, Fine Gael)
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Fundamentally, it is the same. There has not been change of any relevance. Does Mr. McDonagh have a view on densities? You know the way there are all of the variations that are happening now in the county development plans. I have seen proposals to increase densities - certainly, I have seen it in Wicklow. It is kind of a neat solution to hit targets. To be honest, I am little bit concerned about it and sometimes the densities might be a little bit high and may not be suitable given the character and nature of certain towns. Does Mr. McDonagh have any view on that?
Mr. Brendan McDonagh:
I have to be careful here because under the NAMA legislation, I am not allowed to comment on Government policy. On a personal level, I do not think a one-size-fits-all approach works. It is probably incumbent on local authorities which know their county best to look at densities for different towns so there is not the same density across the whole county.
I grew up in Kerry. For example, if you said there was a density for Tralee and Killarney that should be the same for the smaller town where I am from that is just outside of Killorglin, that would not really be sensible. Each local authority should be sensible and cognisant of what works. In my view, it is not a huge amount of extra thinking to do. They are best placed to determine that because I believe the local authority knows its own county best.
Edward Timmins (Wicklow, Fine Gael)
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On NAMA generally, how would Mr. McDonagh sum up its performance in light of its initial objectives?
Mr. Brendan McDonagh:
In terms of our performance, it is indisputable that at the start, everybody said we would lose €6 billion, €8 billion or €10 billion. We proved that wrong and recovered €11.2 billion for the taxpayer. I do not think financial objectives were missed. In terms of other things we got involved with which the then Minister for Finance, Michael Noonan, asked us to get involved with, it primarily started off with things like the Dublin docklands SDZ. We took wasteland which was there between the conference centre on both sides of the Liffey, the north and south side, and turned it into grade A office space by working on that. We made a lot of money on that for the taxpayer. That was a sensible thing to do.
In terms of the residential programme, people say we have been involved with 44,500 units. If we did not get involved in that business in 2014 or 2015 with a push from the then Minister, Michael Noonan, I think those 44,500 units would have been fewer than 20,000 units without our involvement. We did as much as we could. As I said to another Deputy here today, there could have been an opportunity to do something different with NAMA but it was not decided to go that way and that is fine. That is a policy decision of Government and we are where we are today.
Edward Timmins (Wicklow, Fine Gael)
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With the aid of hindsight, would Mr. McDonagh have done anything different? Should NAMA have done anything different?
Mr. Brendan McDonagh:
It is hard to know and, again, I have to be careful to not comment on policy but I think there was probably an opportunity for NAMA to become a precursor to the LDA before that was set up. We had a lot of expertise in-house to do that but the Government decided to set up the LDA and good luck to the LDA. The chief executive of the LDA was a former CFO who worked with me in NAMA. A few other people in the LDA used to work with me as well. They are good people.
What I learned from setting up NAMA at the start is that it takes a long time to get the right people to build up the organisation and then you wind it down but when you wind it down, you lose a lot of the expertise you had there. It has taken the LDA a long time to----
Edward Timmins (Wicklow, Fine Gael)
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To build its own expertise.
Edward Timmins (Wicklow, Fine Gael)
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Did many NAMA people go to the LDA?
Edward Timmins (Wicklow, Fine Gael)
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They had the experience from NAMA.
Mr. Brendan McDonagh:
Yes. Some of them were very good people - they were all good people but some of them definitely had expertise in housing and other people had expertise in other areas. We are where we are. NAMA did what it said on the tin and what we were obliged to do under the legislation. Other people think we should have done lots of different things but some people have not really read the legislation to see what we could and could not do. That is the way the cookie crumbles and that is what it is.
Edward Timmins (Wicklow, Fine Gael)
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My last question is a very general one. Is there anything we should be doing today to avoid a repeat of what happened? I accept it is nearly more a banking question but is there anything we should be doing?
Mr. Brendan McDonagh:
When I started NAMA, I was looking for staff left, right and centre. One of the guys who came in on a one-year contract working for me was in his mid-sixties. He worked for the banks and came in and worked for me and helped me out at the start. He used to work in Bank of Ireland. I asked him how this happened and he told me that when he joined Bank of Ireland, within six months of him joining Bank of Ireland had a problem with its loan book. He said his boss told him that this was fantastic for his future career, because early on in his career he would see a crisis, and when he would be lending money in the future he would remember this, and Bank of Ireland would never have a crisis ever again. About five years later, he had moved up through the banks, I do not know if it was Bank of Ireland or somewhere else, and the bank had another crisis. He met up with his boss and said, "Remember this thing you said to me that would never happen? It has happened again." The guy turned around to him and said that what happens in banking is that banks do not have any corporate memory. When things are bad they are really bad and when things are good they do not want to talk about the bad, so things will happen again in future.
I would be reluctant to say that this would never happen again but I do think there was seriously lax regulation by the Central Bank and Financial Regulator in the Celtic tiger era, helped in no small part by global accounting rules which did not recognise future losses even though they were staring right at them. The accounting rules allowed them to not recognise those losses because they were future losses, even though they could see them happening right in front of them. This was global; it was not just in Ireland that effectively people lost the run of themselves. I think we are in a different space today and I hope for the country's sake that the banking system is never reliant again on the taxpayer and the man in the street to bail it out.
Joe O'Reilly (Fine Gael)
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Mr. McDonagh is very welcome. It is good to hear him. I will ask a supplementary to Deputy Timmins's last question before I go into my own. Does Mr. McDonagh think the level of regulation now is enough for protection for the future?
Mr. Brendan McDonagh:
A lot of my friends work in the banking system and they are constantly complaining to me that they think the regulation is overly strict. In the scheme of things, if we are trying to protect an economy, the Central Bank is not there to be your friend, it is there to protect the financial well-being of the country and the citizens. Like everything, there can be extremes but I think that fair regulation is probably more, despite my friends who disagree with me. I think it is better for regulation to be tough but fair than having lax regulation or easier regulation. Like everything, things can be refined.
Joe O'Reilly (Fine Gael)
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You think it is rough medicine but necessary.
Joe O'Reilly (Fine Gael)
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And it is adequate as well.
Joe O'Reilly (Fine Gael)
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If I can move to my own questions, some of this was addressed in the opening statement but I would like to go over it again. Could Mr. McDonagh explain again what exactly is being handed over now to the NTMA? Is all the land gone out of the LDA and are all the debts realised? What exactly will NAMA be passing on to the NTMA?
Mr. Brendan McDonagh:
There are two aspects to it. Even since I sent the speech in yesterday afternoon, we got another almost €5 million in today so we are down to €25 million rather than €30 million now. Of that €25 million and the breakdown of what is left, there are liquidation receipts which have to go through a liquidator and get court approval to release as liquidated realised assets of about €22 million. There are bankruptcy receipts of probably about €2.5 million. The residual, then, is local authority bonds. It takes a long time to get money back from the local authorities because with taking in charge, it takes a long time for them to take over sites where houses are build. You have to get them out, they come up with snag lists that have to be dealt with. That is close to another €1 million. There is about €25 million worth of assets remaining. There is not a huge list of assets remaining. As I said in my opening statement, that money will come in not at NAMA's timing or the NTMA's timing but at a time when the bankruptcy trustee realises the bankruptcy estates, the liquidator realises the liquidations and the local authorities complete their work so that they can give the money back that was given to them at the start when housing was being built.
The remaining thing then, as I said earlier, is that we effectively have six live litigation cases, three against NAMA and three that NAMA is pursuing. We have had good success over the past year in terms of resolving a lot of those. I think in terms of those ones, some will go through the court process and people will just resist it and let it go through the court process. That is their prerogative. Some of them will probably come forward and settle. I hope they will. That is what is left. As I said to Deputies O'Callaghan and Brennan, I would be hopeful that most of this can be resolved within two years.
Joe O'Reilly (Fine Gael)
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Will there be that length of time in the handover?
Joe O'Reilly (Fine Gael)
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The handover will be fairly immediate.
Joe O'Reilly (Fine Gael)
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That will all be handed over.
Joe O'Reilly (Fine Gael)
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Just to turn to the perennial theme this evening, congratulations on Professor John FitzGerald's assessment. On the land issue, the popular criticism, the man in the pub would say that you did not build enough houses or affordable houses. What does Mr. McDonagh say to that and does he think the Land Development Agency is running with that ball adequately now?
Mr. Brendan McDonagh:
Two things. We would have funded as many houses as any of the developers who were with us presented viable proposals for. We had a huge amount of money to give them, to lend to them before we gave it back to the Exchequer. We have given almost €5 billion in cash back to the Exchequer. We were prepared to lend a lot of that to these people to build houses if they wanted it. Like everything, as land prices went up, especially from 2016 onwards, a lot of these people wanted to get out of NAMA. Builders wanted to leave NAMA and go back to their normal banking system. They just paid back their debts to NAMA and good luck to them. They moved on. I would say fair dues to them. They did not want to borrow money from us. As the portfolio got smaller as we went through the years, we had fewer and fewer people to borrow money from us. Then we started giving cash back to the Exchequer because we did not need it, there was no point. I remember our first cheque back to the then Minister for Finance, Paschal Donohoe, was in 2020. In that year the Government needed a lot of money because of the Covid supports and we handed over a cheque of €2 billion. That was our first cheque of 2020. We gave €1 billion back the following year and now we are up close to €5 billion. We had cash available to lend to people if they wanted to build houses. Some of the major developers that are now working with the LDA used to be in NAMA. They are building houses at present, which is good.
In terms of the LDA, we never had a social housing mandate. We inherited a portfolio at the very start which had a lot of unfinished housing estates. We fixed up those unfinished housing estates, bought them and put them into an SPV. We gave those houses to local authorities and to approved housing bodies. There ended up being 1,366 units which we handed over to the LDA last July.
They are all occupied with about 8,000 people in those houses. We did what we did whereas the LDA's mandate is broader. It is able to do cost-rental housing and things like that. That was never in our mandate, but the LDA got specific legislation to allow it to do that.
Joe O'Reilly (Fine Gael)
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In ballpark terms, what percentage of the debts that NAMA encountered in its mandate did it recover? Will Mr. McDonagh explain what the NTMA's development function is? It has the strategic investment fund. Apart from the LDA and housing development, does the NTMA have a role in developing? Is it just infrastructure or is it strategic investment that will acquire wealth for the State?
Mr. Brendan McDonagh:
In fairness to ISIF, the infrastructure fund is within the NTMA. I am not a spokesperson for it, but I will tell the Senator what I know. It has a pretty large amount of money set aside that it is investing in housing. It invests in funds which give loans to developers, and it also invests in funds that give equity to-----
Joe O'Reilly (Fine Gael)
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Will the money that NAMA is handing over to it go into that?
Mr. Brendan McDonagh:
NAMA's money goes into the Exchequer, and it gets money to manage on behalf of the Government. Of course, it is between the NTMA, Minister for Finance and the Government to decide how they allocate that money, but they are doing a fair bit on housing. It has an investment mandate. Our mandate was the recover the funds, whereas its mandate is to invest funds and get a return for them. The legislation in NAMA was "you have issued all this debt, you have got to pay this debt back" because otherwise Ireland, as a State through the NTMA, would not have been able to borrow money in the bond markets. By us paying off our debts very quickly, we got rid of the Government guarantee, and this allowed the NTMA to take advantage of much lower interest rates in the bond markets because it no longer had the noose of NAMA debt hanging around its neck. I think that has to be acknowledged.
Joe O'Reilly (Fine Gael)
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People watching would be interested to hear the broad figure that NAMA recovered. In terms of its overall success, does NAMA have a broad figure of the amount it recovered?
Joe O'Reilly (Fine Gael)
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That is incredible.
Mr. Brendan McDonagh:
Some of that money went towards running NAMA and other various things. We also had to pay interest to the banks on our bonds that we borrowed under IOUs, which is substantial. After that we were given €5.6 billion. On top of the €5.6 billion, we overpaid to the banks day one and that money wound back to the Government, which was good. People do not understand this, but if I was an investment manager running a fund and we were earning 12.9% per annum, which is what we earned for every year of NAMA's operation, people would say that it was a super performance, but there is no praising that.
Pearse Doherty (Donegal, Sinn Fein)
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I apologise, I had another engagement on. I welcome Mr. McDonagh to the committee for this pre-legislative scrutiny of the legislation that will wind up NAMA. I apologise if some of these questions have been answered on the record. If Mr. McDonagh is repeating himself or there are detailed answers, I can look back at a later stage. How much residual activity is envisioned to remain upon the liquidation of NAMA?
Mr. Brendan McDonagh:
As I just said, we had about €46 million cash to recover at the start of this year. As of today, it is down to €25 million. About €22 million of that is to be recovered through liquidators. Bankruptcy accounts for about €2.5 million and local authority bonds account for just shy of €1 million. On top of that, there are six live litigation cases.
Pearse Doherty (Donegal, Sinn Fein)
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Following the announcement that NAMA was being wound up, how many employees left under the voluntary redundancy scheme in 2024 and 2025? Was it 75 in 2024? Does Mr. McDonagh have the figure for 2025?
Pearse Doherty (Donegal, Sinn Fein)
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Were they all voluntary redundancies?
Pearse Doherty (Donegal, Sinn Fein)
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Those employees were assigned to NAMA but were technically employed by the NTMA. Is that correct?
Mr. Brendan McDonagh:
Yes, everybody was an NTMA employee, but they were employed under specified purpose contracts for as long as NAMA required them.
Pearse Doherty (Donegal, Sinn Fein)
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There are ten employees left in NAMA. What is its current annual wage bill?
Pearse Doherty (Donegal, Sinn Fein)
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So it is €4 million a year. Is that just for the ten employees?
Pearse Doherty (Donegal, Sinn Fein)
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Do we know what the wage budget is for the new resolution unit?
Pearse Doherty (Donegal, Sinn Fein)
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I understand that it is not Mr. McDonagh's responsibility, but is he aware of the salary budget for the resolution unit?
Pearse Doherty (Donegal, Sinn Fein)
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How will the resolution unit be structured? Will it have a CEO?
Pearse Doherty (Donegal, Sinn Fein)
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This is in a public domain and sometimes it is awkward asking these questions, but we have to do it because the public have an interest in it in terms of the costs. Mr. McDonagh's own salary is public knowledge. It is published and, fair play, it is part of the NAMA legislation. It is just in excess of €450,000. Will that be retained when he goes to the resolution unit?
Pearse Doherty (Donegal, Sinn Fein)
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It will not be retained.
Pearse Doherty (Donegal, Sinn Fein)
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Will he explain how the new salaries will work?
Pearse Doherty (Donegal, Sinn Fein)
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What will the salaries of the employees of the new unit be reduced to?
Mr. Brendan McDonagh:
There will not be a chief executive anymore. Everyone is on an individual contract. That is between the NTMA and the people who are going to the resolution unit. As I said earlier, because these people are on specified purpose contracts, I understand that the NTMA has given them two-year contracts, so effectively after the end of the two years once the resolution unit has completed its work, which I think it will, they will leave.
Pearse Doherty (Donegal, Sinn Fein)
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Is Mr. McDonagh going to the resolution unit?
Pearse Doherty (Donegal, Sinn Fein)
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Is he going back to the NTMA?
Pearse Doherty (Donegal, Sinn Fein)
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That is grand. Eight are going to the resolution unit and Mr. McDonagh is going into the NTMA. There are ten employees at the minute. What will the other person do?
Pearse Doherty (Donegal, Sinn Fein)
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Mr. McDonagh's remuneration will be reduced. Is he willing to disclose how much it will reduce by?
Pearse Doherty (Donegal, Sinn Fein)
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I presume that Mr. McDonagh will then not be entitled to the 60% bonus of his base salary. Is that correct?
Mr. Brendan McDonagh:
That was in my contract even before I went to NAMA, but I have never taken my bonus.
Pearse Doherty (Donegal, Sinn Fein)
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I know that he has never taken it and that is commendable. Some would argue that he did not need to take a bonus with a salary of €450,000, but it will no longer be public.
Mr. McDonagh would probably make the point that no other NTMA salary, or whether someone takes the bonus, is public either. Would that be the case?
Mr. Brendan McDonagh:
In fairness, if it pays performance-related pay, PRP, NAMA, like the NTMA, publishes it in its annual report every year.
Pearse Doherty (Donegal, Sinn Fein)
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Yes. Does the NTMA also publish the scale of salaries?
Pearse Doherty (Donegal, Sinn Fein)
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It will publish next year, obviously. Is it 92 people who are in the NTMA? Sorry, it is 92 in NAMA. When does Mr. McDonagh expect that the entire resolution work by the unit will be complete?
Mr. Brendan McDonagh:
I suspect and hope it could be done within two years. The problem is NAMA or the NTMA cannot control what liquidators do. Liquidators have to sell and realise assets and then go to court and prove to the judge they are making distributions and things like that. Bankruptcy trustees cannot be controlled. The final part is local authority bonds, which are "how long is a piece of string" because it takes a long time until local authorities give back money.
Pearse Doherty (Donegal, Sinn Fein)
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I will tease out a final area very briefly to do with NAMA itself. NAMA is coming to an end. It is probably at the point where the door of the financial crisis is closing but so many people still live with the scars. There are so many people scattered across the world as a consequence of that, but let us just look at NAMA. Does Mr. McDonagh accept that at the time we were dealing with NAMA legislation, there were reports looking at recovery levels of the assets which indicated that within ten years we would see recovery of those assets?
Pearse Doherty (Donegal, Sinn Fein)
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The value of property-----
Pearse Doherty (Donegal, Sinn Fein)
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I am not asking about the first two or three years because we know that property values were dropping and then started to recover during that period. I am talking about whether there was any report during that time that looked at the recovery of property values within the State at a ten-year projection or beyond.
Pearse Doherty (Donegal, Sinn Fein)
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Was there a report? Just answer the question.
Mr. Brendan McDonagh:
No, there was not a report, but the NAMA board had a strategic plan, which was revised every year, that looked at how many assets we would sell. Before the Deputy came in - this will be in the transcript if he wants to go back on it - I said that while NAMA was under the troika, the troika was kicking the door down with us in saying it wanted us to sell all the assets. The troika did not care whether it was a fire sale; the money should be paid back so the banks would not come to the ECB looking to exchange their bonds for cash.
Pearse Doherty (Donegal, Sinn Fein)
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That is not the question I asked, with respect. I am well familiar with that. I am also familiar with the former Minister, Michael Noonan, who was also putting pressure on NAMA to sell assets so we would find a floor in the market. I understand all that. Is it not the case there was supporting documentation at the time indicating that within a decade property values would return close to where they were? Is that not the case or am I-----
Pearse Doherty (Donegal, Sinn Fein)
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Obviously, every report that estimates property values is speculation. They are estimations.
Pearse Doherty (Donegal, Sinn Fein)
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Okay, that is fine. If there is no report Mr. McDonagh is familiar with, that is grand. The benefit of hindsight is great. I take the point that Mr. McDonagh said the troika - I will finish on this - was kicking down the door telling NAMA it needed to sell, whether it wanted to sell or not. Noonan wanted NAMA to sell. He wanted the vulture funds in and he wanted to get a floor on property markets, which was terrible policy. There was serious pressure put on NAMA. Is it not just fact, however, that if NAMA had managed the asset, which is part of its name, and given where property prices are, we would have made billions of euro extra?
Pearse Doherty (Donegal, Sinn Fein)
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How could Mr. McDonagh disagree?
Pearse Doherty (Donegal, Sinn Fein)
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How could you disagree? Some of the properties NAMA sold were flipped and turned hundreds of millions in a short period of time.
Mairéad Farrell (Galway West, Sinn Fein)
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One speaker at a time.
Pearse Doherty (Donegal, Sinn Fein)
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What do you not accept?
Mr. Brendan McDonagh:
The reason is, and I said this, the NAMA board and I resisted in terms of fire-selling assets. When the market was in its worst form up to the end of 2012, we only had some €1 billion worth of Irish assets. A floor had to be found and money had to be found-----
Pearse Doherty (Donegal, Sinn Fein)
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That is a separate argument. Sorry, I just want clarification.
Pearse Doherty (Donegal, Sinn Fein)
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Is Mr. McDonagh disagreeing with me that if NAMA held the assets and sold them today, it would not have made any more money? Is that seriously what he is trying to explain? Nobody in the world would accept that is a credible position.
Pearse Doherty (Donegal, Sinn Fein)
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Okay.
Pearse Doherty (Donegal, Sinn Fein)
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Okay, explain. Fine.
Pearse Doherty (Donegal, Sinn Fein)
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No, that is okay.
Mr. Brendan McDonagh:
What I was saying to the Deputy was that nobody talks about the assets we sold in 2016, 2017, 2018 and 2019, which we got very good prices for, that are back on the market today at 40% or 50% of their value. I will give a few examples of this that the Deputy can check for himself. We sold The Square shopping centre for €250 million. That sold two years ago, reportedly, for less than €130 million. That was €120 million less. We sold that in 2017 or 2018. At Dublin Landings, where NAMA and the NTMA are based at present, we were involved in selling new buildings for €120 million. One of those buildings sold for €50 million a couple of months ago.
Pearse Doherty (Donegal, Sinn Fein)
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I could give countless examples of the other things.
Pearse Doherty (Donegal, Sinn Fein)
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For clarity, and I will finish on this, is the CEO of NAMA saying, even with hindsight, that if it managed the assets for a longer period, when there would have been property recovery, NAMA would not have made any additional money? Is he seriously trying to tell this committee that point?
Mairéad Farrell (Galway West, Sinn Fein)
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One speaker.
Mr. Brendan McDonagh:
What I am saying is we could not have operated on that parameter. The Deputy knows we could not have operated on that parameter because we had significant government-guaranteed debts that needed to be paid off. Those being paid off allowed the NTMA to borrow money on the bond markets at a much cheaper rate-----
Pearse Doherty (Donegal, Sinn Fein)
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NAMA could have made more money by holding them but, again, there were reasons it did not. That is my point.
Pearse Doherty (Donegal, Sinn Fein)
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Mr. McDonagh did disagree with me a few minutes ago.
Mairéad Farrell (Galway West, Sinn Fein)
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Go raibh maith agaibh-----
Mairéad Farrell (Galway West, Sinn Fein)
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Go raibh maith agaibh-----
Pearse Doherty (Donegal, Sinn Fein)
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If we managed the assets, we would have made billions of euro more.
Pearse Doherty (Donegal, Sinn Fein)
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There were reasons NAMA did not, including pressure from government-----
Mairéad Farrell (Galway West, Sinn Fein)
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Go raibh maith agaibh. One speaker at a time. It is nonsense if it is not one speaker at a time. It is one speaker at a time and the Deputy is out of time.
Pearse Doherty (Donegal, Sinn Fein)
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Go raibh maith agat, a Chathaoirligh.
Mairéad Farrell (Galway West, Sinn Fein)
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I will go to my own questions. Deputy Doherty made a good point on NAMA. When people look back at the time when NAMA came into existence, that whole period was an incredibly difficult time. So many people really suffered. A lot of people ended up all over the world as a result.
I would like to look at the impact now and the different views in the here and now. Professor John FitzGerald's evaluation and report on NAMA was mentioned. It looked at the financial returns and not so much the contribution to the social and economic development of the State. One of the things that sticks out in the here and now relates to what has happened to tenants who are in places that were sold off by NAMA. Obviously, NAMA came into existence at a very different time. We are now in a situation where there is a severe housing crisis. I am sure Mr. McDonagh is aware, as it has been in the news and NAMA spokespeople have commented on it, that tenants living in homes are now facing eviction. It is my understanding these properties were sold off approximately a year ago. When NAMA was selling off at that point, was there consideration at any point in relation to how the housing crisis is impacting on tenants in the here and now? Is everything specifically on the financial return?
Mr. Brendan McDonagh:
It was not NAMA selling directly. It was either the debtor or the receiver. There was never an occasion when we asked for anybody to be evicted at the time.
When we are selling property, we cannot put any restrictions on what the new buyer does with it, be it leaving the tenants in place or something else.
Mairéad Farrell (Galway West, Sinn Fein)
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That is an interesting point. Was the focus only on financial return, rather than-----
Mairéad Farrell (Galway West, Sinn Fein)
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I am asking genuinely.
Mairéad Farrell (Galway West, Sinn Fein)
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I understand that.
Mr. Brendan McDonagh:
What the new buyer decides to do with it afterwards is a matter for them because we will have sold it. Unfortunately, I cannot control that. In the scheme of things, I would not like to see anybody evicted, but the reality is that sometimes people do get evicted. The person who owns the asset will have wanted to make use of it themselves or to sell it. The market reality is that if you have a rented property and there is no tenant in it, you get a higher price. Of course I wish buyers would not evict, but the reality is that they do it. I do not disagree with the Cathaoirleach in that regard.
Mairéad Farrell (Galway West, Sinn Fein)
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Mr. McDonagh is probably aware of what I am talking about because it has been very much in the news of late. We have been seeing larger scale evictions happen across the State more frequently in the last number of weeks. Given the situation we are in with the housing crisis, things are impossible. There is a very uncertain future for people. Does Mr. McDonagh recognise, having regard to the reputational aspect, that where people had been in properties under the control of NAMA, say, and are now facing eviction, there is an impact again, with NAMA coming into the news in a negative light-----
Mr. Brendan McDonagh:
I have to correct that again because it is easy for people to blame NAMA. If I am thinking of the same case as the Cathaoirleach, the actions are those of a liquidator that was appointed by the courts. We have no control over what the liquidator does. It is easy for people to say a company was somehow associated with NAMA, but there will actually be information about it that is probably not in the public domain. Effectively, it is about the actions of the liquidator that is obliged by the courts to liquidate the assets and give the distribution to creditors. It is easy to say this or that was NAMA's fault, but what might be reported is not always fully the case.
Mairéad Farrell (Galway West, Sinn Fein)
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Okay. One demand of the tenants is to know who owned the property at the time. Would that come out in any report by NAMA?
Mr. Brendan McDonagh:
When liquidators produce reports, they have to file them in the Companies Registration Office, so it will be a matter of public record as to who sold the asset. If the case I have in mind is the same one the Cathaoirleach is thinking about, it will show that it is the liquidator who is selling the assets, not NAMA.
Mairéad Farrell (Galway West, Sinn Fein)
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I fully understand that. However, I am asking whether there is any report published by NAMA in which the information would be available.
Mr. Brendan McDonagh:
No, because we have no assets – land or residential units – left in our portfolio. We do not publish details of individual assets because of bank confidentiality obligations. Sometimes when people say things, they might not have the full picture. I am not saying it is their fault. Liquidators and receivers take actions independently of NAMA because that is what their legal obligations require.
Mairéad Farrell (Galway West, Sinn Fein)
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I actually do understand that. I fully understand what Mr. McDonagh means but I still imagine that in the view of the general public, the-----
Mairéad Farrell (Galway West, Sinn Fein)
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One of the things Mr. McDonagh said earlier, of which I took a note, was quite interesting. He said that NAMA never had a social housing mandate but that it sold 1,366 units to approved housing bodies and for social housing.
Mr. Brendan McDonagh:
Yes, we bought them from developers. Many of them were associated with unfinished housing estates, which was a significant problem at the start of the term of NAMA. We completed the developments and finished off the houses. Instead of selling them, we bought them from the developer or receiver, as the case may be, placed them into a special purpose vehicle, SPV, and leased them to local authorities and approved housing bodies. We transferred the SPV, which is called National Residential Property Services Limited, NARPS Limited, to the LDA last July, so it is now in control of it. The tenants were unaffected by that.
Mairéad Farrell (Galway West, Sinn Fein)
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It is an interesting point because Mr. McDonagh said NAMA never had a social housing mandate. Something else mentioned earlier was that it was not about who properties were sold to. Does Mr. McDonagh believe, given where we are now, at the height of the housing crisis, it was a weakness that it was not part of the mandate?
Mr. Brendan McDonagh:
We tried to do as much as we could. We offered 7,500 units to the local authorities and, in the end, they took only 3,000 of them and turned down 4,000. I have been through this previously with committees of the Oireachtas regarding the reasons we were given for turning them down. This was co-ordinated through the Housing Agency and local authorities at the time. We had developers lined up who had agreed that we could buy the units and lease them out, as we did with NARPS. However, people turned them down, saying they did not want four- or three-bedroom houses in their area and that there was too much social housing and no public transport there. Every type of excuse was made. All we could do was offer them. The fact that only 3,000 of the 7,000 units were taken up was not for want of trying on the part of myself and my colleagues.
Mairéad Farrell (Galway West, Sinn Fein)
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I meant to ask whether it would have been good for NAMA to have that changed towards the end.
Mr. Brendan McDonagh:
Towards the end, it was probably too late. As I said earlier, if anything was to change in terms of NAMA to give it a different bent rather than a purely financial one, it could certainly have been an option of the Government. However, the time to do that was probably around 2017.
Mairéad Farrell (Galway West, Sinn Fein)
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Okay.
Mairéad Farrell (Galway West, Sinn Fein)
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I am out of time, but I will ask a quick question on the dissolution of NAMA and the property expertise of its staff. The State has many properties that are managed in different ways and we sometimes hear of properties in the State lying empty for long periods. Does Mr. McDonagh believe there will be a loss of expertise in this regard? I realise what I am talking about does not reflect NAMA's role.
Mr. Brendan McDonagh:
There was a real centre of expertise in NAMA that I tried to hold onto for as long as possible. However, we have been losing that expertise in large numbers since 2020. The staff have moved to other positions. There was a bank of expertise that could have been used, but my role was to wind down NAMA.
Mairéad Farrell (Galway West, Sinn Fein)
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I know.
Mr. Brendan McDonagh:
With the benefit of hindsight, everyone can say we should have done this or that, but NAMA could not do more than it did because of the restrictions under the legislation.
Mairéad Farrell (Galway West, Sinn Fein)
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It was more about my other point.
Buíochas le Mr. McDonagh agus le gach éinne eile. We will now suspend until 6.30 p.m., when the committee will meet witnesses from Chartered Accountants Ireland, the Irish Tax Institute and the Bar of Ireland to engage in pre-legislative scrutiny of the finance (tax appeals and fiscal responsibility) Bill 2025.