Oireachtas Joint and Select Committees
Thursday, 2 July 2026
Public Accounts Committee
Financial Statements 2025: National Asset Management Agency
2:00 am
John Brady (Wicklow, Sinn Fein)
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This morning, we will engage with the National Asset Management Agency to examine its financial statements 2025. On behalf of the committee, I welcome Mr. Brendan McDonagh, chief executive officer of the National Asset Management Agency, and Mr. Des Carville, head of the shareholding and financial advisory division at the Department of Finance, who is attending in a representative capacity. We are also joined by officials from the Office of the Comptroller and Auditor General including Mr. Seamus McCarthy, Comptroller and Auditor General, who is a permanent witness to the committee, and Ms Sinéad Keane, audit manager. They are all very welcome.
Before I begin, I wish to explain some limitations to parliamentary privilege and the practice of the House as regards references the witnesses may make to other persons in their evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected pursuant to both the Constitution and statute by absolute privilege. This means they have an absolute defence against any defamation action for anything they say at the meeting. However, they are expected not to abuse this privilege, and it is my duty as Cathaoirleach to ensure that this privilege is not abused. Therefore, 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. Witnesses are also reminded of the long-standing parliamentary practice to the effect that they should not criticise or make charges against any person or entity by name or in such a way as to make him or her identifiable or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity.
I now call on the Comptroller and Auditor General to deliver his opening statement.
Mr. Seamus McCarthy:
As members are aware, the National Asset Management Agency, NAMA, was established in December 2009 as a key part of the State’s response to the 2008 banking crisis. NAMA was given extensive powers to fulfil specific statutory purposes, which included the acquisition of property-related loans from the participating financial institutions, management of the acquired loans and related capital, and ultimately disposing of these assets in a manner and at a time that best protected the State’s interests.
It had originally been envisaged that NAMA would have a life of around ten years. However, following a Department of Finance review in 2019, NAMA’s timeline was extended for an additional five years. Legislation dissolving NAMA and transferring its residual assets to a resolution unit in the National Treasury Management Agency is progressing and is likely to be enacted shortly.
NAMA’s 2025 financial statements indicate that it had an income of €107 million in 2025. The profit for the year after deducting administrative expenses and tax was just under €78 million. This was down from the profit of €198 million reported for 2024, reflecting the continuing reduction in NAMA’s debtor loans. During 2025, NAMA transferred €450 million in cash to the Exchequer and property assets valued at €425 million to the Land Development Agency.
When NAMA was established, there was considerable concern that there should be clear and regular public accountability for its operations, in particular because of the substantial economic and commercial risks involved, but also because of the risks of corruption and exploitation of distressed property and banking assets.
In addition to annual financial audit responsibilities and the opportunity to carry out value-for-money examinations, the NAMA Act 2009 included a requirement for formal reviews by the Comptroller and Auditor General every three years of the extent to which NAMA has made progress towards achieving its overall objectives. The report before the committee today is the fifth, and likely final, such progress report. It looks back over most of NAMA’s lifecycle and aims to present a balanced overview of NAMA’s achievements as it enters its final phase.
At the outset, NAMA paid €31.8 billion for the property-related loans it acquired from the participating institutions. This represented a 57% discount on the €74.4 billion par value of the acquired loans. NAMA funded the loan purchases by issuing debt totalling €31.8 billion, with the objective of redeeming all the debt by 2020. In fact, NAMA achieved the redemption of most of the debt much earlier than planned. In addition, NAMA was able, without recourse to any further borrowing, to cover all its administrative costs, which up to the end of 2024 totalled almost €1.2 billion.
At the time of my report, NAMA had projected that its total contribution to the Exchequer would be €5.6 billion, made up of a projected lifetime surplus of €5.15 billion and €450 million of corporation tax payments.
NAMA had a statutory objective to obtain the best achievable financial return for the State. In arriving at the prices it paid for the loans at the outset, NAMA effectively anticipated a rate of return of around 5% by reference to projected loan cash flows. As NAMA approaches the end of its life, the rate of return it achieved on its overall operations is estimated to be around 6.8%, reflecting a moderately better outcome than was anticipated at the outset of NAMA’s activities.
Obtaining the best achievable financial return was NAMA’s primary objective, which was directly mandated by the NAMA Act. NAMA could adopt other objectives, but these were secondary and had to be achieved while ensuring the best achievable return.
In 2014, NAMA adopted an objective to facilitate the delivery of office accommodation in Dublin, when the market was at about its lowest point. At that time, NAMA had interests in a substantial proportion of the undeveloped land in the Dublin Docklands. By the end of 2024, substantial commercial space and residential accommodation had been delivered in these sites.
In late 2015, the NAMA board also formally set out its intention to provide funding and to co-ordinate and manage the delivery of 20,000 housing units by the end of 2020. The plan recognised that achieving that target would be a challenge, and this turned out to be the case. By the end of 2024, NAMA had delivered a total of 12,343 housing units through developments in which it had a direct interest.
Separately, NAMA worked with some of its debtors to develop sites with the potential to be used for housing, including in seeking planning permissions and resolving title or boundary issues. Between 2011 and the end of 2024, NAMA debtors and-or receivers sold sites that had the potential to deliver an estimated 105,000 residential units. NAMA estimated that by end 2024, only just over a quarter of those potential residential units had been constructed. Because of the site sales, NAMA no longer had any control over the speed of that housing delivery.
NAMA also set a target of delivering 2,000 social housing units by the end of 2015, which it achieved. By the end of 2024, NAMA had delivered or committed a total of 2,957 units for social housing. This included 1,366 social housing units owned by a NAMA subsidiary that transferred to the Land Development Agency, which is continuing to lease the units to approved housing bodies.
To conclude, I would like to thank the chief executive and his current and former NAMA board colleagues and staff for the positive co-operation they afforded over the years to the audit and examination teams from my office. While we did not always agree on every point, I think I can reasonably say we learned a lot from one another and respected each other’s professionalism and mutual commitment to ensure the best outcome was achieved for Ireland and Irish taxpayers.
John Brady (Wicklow, Sinn Fein)
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I thank Mr. McCarthy. I now ask the chief executive to deliver the opening statement on behalf of the National Asset Management Agency. As set out in the letter of invitation, Mr. McDonagh has five minutes to make his opening statement.
Mr. Brendan McDonagh:
Good morning. The committee’s invitation refers to the committee’s planned discussion of NAMA’s 2025 financial statements, published in May, and the Comptroller and Auditor General’s section 226 report on NAMA’s progress to end 2024, also recently published.
I am pleased to report that the 2025 financial statements show that NAMA continued to have strong cash generation and remained profitable, notwithstanding the significantly reduced scale of the remaining portfolio. Despite this reduced portfolio, NAMA reported a profit of €78 million in 2025 and generated €180 million in cash, bringing the total cash generation since inception to €48.5 billion.
Crucially, our strong cash position and profitability have enabled us to continue our surplus cash transfers to the Exchequer, with €450 million transferred in December 2025.
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.
Additionally, 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, with €875 million in 2025 alone. The transfer to the LDA included the 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 that the LDA believe can deliver at least 7,000 new homes once planning is obtained.
When we add that to the €5.6 billion that 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.
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 reduced further, to around €22 million. Unfinished activity at NAMA's dissolution is likely to relate to ongoing litigation of eight cases, the sale of one remaining foreign-based asset, the return of local authority bonds and claims in bankruptcies and liquidations. The timing of the resolution of these activities is out of the hands of NAMA.
Our residential delivery programme completed in 2025, bringing overall delivery to over 44,500 new homes, with 14,660 directly funded and delivered, is an important contribution at a time of pressing housing need. Similarly, our transformation work in the Dublin Docklands strategic development zone, SDZ, which is twice the size of the original IFSC, is there for everyone to see, from the conference centre to the 3 Arena on the north side and from City Quay to Capital Dock on the south side of the Liffey.
Progress during 2025 allowed NAMA to announce the substantial completion of its wind-down programme 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 the dissolution date, which is likely to be in the coming weeks once legislation is enacted. At that point, NAMA will cease operations completely and remaining activities, including the residual portfolio of €22 million, plus at least €50 million in cash held by NAMA, will transfer to the proposed resolution unit within the National Treasury Management Agency, NTMA. The timing of the resolution of these residual activities post dissolution is out of the hands of NAMA or the NTMA. The existence of such residual unresolved activity after a work-out vehicle has concluded operations was anticipated and is typical of the experience of vehicles of this nature globally.
I will turn now to the C and AG's report on our progress and our activities. We welcome the publication by the C and AG of the NAMA progress reports. A key control and accountability measure contained in the NAMA Act 2009 is the section 226 requirement for the Comptroller and Auditor General to prepare a report every three years, containing an assessment of the extent to which NAMA has made progress toward achieving its overall objectives. The section 226 report, published in May of this year, is the fifth such report. It covers the period to the end of December 2024.
The report demonstrates that in the period under review by the C and AG, the three years to the end of 2024, NAMA made substantial progress towards achieving its overall objectives. We are pleased that we have been able to continue this progress subsequently, as outlined in my summary of the 2025 financial statements and the update provided of activity during the first six months of 2026.
NAMA's progress under seven headings to date is as follows. The first relates to the loans we acquired for €31.8 billion and the redemption of outstanding debt significantly ahead of schedule, a process we completed in 2017 for our €30.2 billion in senior debt, which was State guaranteed - three years ahead of schedule - and in 2020 for our €1.6 billion in junior or subordinated debt. NAMA has been debt free since March 2020.
The second heading is the recovery of our costs, which the C and AG notes has been completed fully and which, in addition to achieving full-cost recovery, will deliver over €5.6 billion to the State - €4.7 billion in cash transferred to the Exchequer, assets with a value of €425 million to the LDA, a portfolio of at least €72 million to the NTMA and €450 million in corporation tax paid.
The third heading relates to NAMA's internal rate of return, IRR, which at 6.8% exceeds the 5% per annum IRR that would have been generated if we had simply recouped the cash projected when acquiring the loans from participating institutions. This is another measure that shows we have exceeded the initial projections. In fact, the real NAMA return is 13% per annum when the overpayment of €5.6 billion in state aid to the participating institutions is taken into account.
The fourth is our debtor management and loan sale activity, which notes that we acquired loans for a total consideration of €31.8 billion. The value of the secured portfolio had fallen to around €96 million by the end of 2025 and to €22 million by quarter 2 of 2026.
The fifth is our objective to facilitate the delivery of commercial property in the Dublin Docklands, which has had a positive transformational impact on the area. The C and AG notes that this is now successfully concluded and delivered a net surplus of €643 million to NAMA.
The sixth is our objective to deliver 20,000 new homes, which was exceeded. We directly delivered over 14,000 new homes on sites in our portfolio by the end of 2025 and contributed indirectly to the delivery of over 30,000 more units on sites that were sold, with the proceeds used to repay NAMA's debt.
The seventh is our social housing delivery. The report notes that we had exceeded our target of 2,000 homes by nearly 50% at the end of 2024, with 2,957 social housing homes delivered.
As we approach NAMA's dissolution, we are fully prepared for this last step. NAMA's primary objective was to protect and enhance value for the State while managing risk appropriately. Over the last year, we completed the major elements of our wind-down, transferred substantial cash and assets to the State and continued to deliver substantial value to the State. Remaining activities are limited and relate primarily to legal processes, which will most likely transfer to the resolution unit in the NTMA at the end of July 2026.
NAMA was never intended to be permanent. However, our broad economic and social contribution to the State should continue to benefit the public long into the future. We have delivered on the commercial mandate set out at its establishment. We have recovered the €31.8 billion used to acquire loans and generated a substantial surplus of €5.6 billion for the State. We facilitated the delivery of over 44,500 homes, supported the development of the Dublin Docklands SDZ, and contributed to social and affordable housing through initiatives such as NARPS and land transfers to the Land Development Agency.
As we approach the end of our journey, I am proud knowing that we have fulfilled the mandate given to us by the Oireachtas 16 years ago. I thank the members of the committee and their predecessors for their interest in the agency since it was established. I respect the important role of this committee in the oversight of the agency and the maintenance of public trust in our work. I appreciate the motivation and sincerity of everyone who has served on this committee, and I believe that they too contributed to the success of the agency. I also extend my thanks to the C and AG and his team. As he outlined very succinctly, we might not always have agreed but we always dealt with each other professionally. I thank him for that.
John Brady (Wicklow, Sinn Fein)
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I thank Mr. McDonagh for his opening statement. Everyone should please note that we will suspend the meeting at 12.30 p.m. or thereabouts for a short break and resume shortly afterwards. I will now open the floor to members. The lead speaker today is Deputy McGrath, who has 15 minutes. All other members have ten minutes. If time permits on the conclusion of the round, we will allow members back in for a short supplementary round of questions.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I thank Mr. McDonagh and Mr. Carville for being here today. They are in the final phases of NAMA. I want to look at some of the macro figures here in terms of the overall value of €31.8 billion in assets and loans NAMA started out with. As I understand it, that came from loans with a book value of approximately €74 billion. There was an approximately 57% writedown on the loans. Mr. McDonagh says NAMA generated a surplus of €5.6 billion to the State. When we add the €31.8 billion to the €5.6 billion, it comes to about €38 billion. If I can ask a macro question at the outset, now that NAMA is winding down, what is the overall cost to the State from the financial crash?
Mr. Brendan McDonagh:
I suppose that may be something more appropriate to put to Mr. Carville in the Department of Finance. What I would say to the Deputy is that it is important to remember that we acquired €74 billion of book value loans, but that loss was crystallised when the loans transferred to NAMA. It was a loss the banks had made. Mr. Carville might want to interject here, but we did our utmost to contribute back as much as possible. Whatever the contribution is towards reducing the cost to the State, we have delivered €5.6 billion back. I do not know what Mr. Carville could add to that.
Séamus McGrath (Cork South-Central, Fianna Fail)
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It is probably a question more for Mr. Carville in terms of the funding that went into the banks. At this point we should be in a position to give a round net figure for the overall cost to the State of the money that went into the banks. NAMA obviously had a critical role in maximising the value of the assets. Are we in a position to give a round figure on that now?
Mr. Des Carville:
Approximately €64 billion went into the banks to recapitalise the banking system, of which €35 billion went into Anglo Irish Bank and Irish Nationwide. Unfortunately, that is largely gone. The special liquidation of the Irish Bank Resolution Corporation, IBRC, which is also reaching conclusion, will generate a surplus of a few hundred million euro, a tiny fraction of the €35 billion that went in. Some €29 billion went into the other three banks, AIB, Bank of Ireland and PTSB. Assuming the current transaction involving the sale of PTSB goes through - we are completely out of AIB and Bank of Ireland - the State will have generated, on a cash-in, cash-out basis, a €1.3 billion surplus. In addition, the three banks contributed €1.6 billion from the bank levy to the Exchequer.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Will Mr. Carville add it up for me?
Séamus McGrath (Cork South-Central, Fianna Fail)
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Going back to NAMA, how was the €31.8 billion initially valued at the time? What process was carried out to ensure it was a fair representation at that point in time, given the scale of the property portfolios involved? How was the figure arrived at?
Mr. Brendan McDonagh:
It was overseen by the European Commission, which monitored it from a state-aid perspective. There were approximately 60,000 individual properties, which all had to be individually valued. They were then part of the input in looking at the value of the underlying loans. We engaged KPMG to audit the process and certify that the valuation was done correctly. The Central Bank and European Commission then engaged Ernst and Young to audit KPMG to make sure it did the job properly and it certified that we had valued the loans properly.
For the first Comptroller and Auditor General report in 2010 on the acquisition process, the Office of the Comptroller and Auditor General examined the process as well and confirmed it was done appropriately. One of the things it signalled was that if these loans had been bought by anyone other than the State, the banks would have got €5.6 billion less. Although the loans had a book valued of €74 billion, they were really only worth €26.2 billion and we ended up paying €31.8 billion. That difference was €5.6 billion of state aid to the banks at the start.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I will pick up on one further figure. In his opening statement, Mr. McDonagh made reference to €48.5 billion of cash generation. Will he explain the difference between that and the €5.6 billion surplus?
Mr. Brendan McDonagh:
I can give the high-level breakdown of that. We had to repay the bonds that were issued for the debt at the start, which cost €31.8 billion. We also advanced money to debtors to complete a number of commercial and residential properties and vendor finance loans of €6.4 billion. We had financing costs, which was the interest we had to pay on the bonds. That was issued at almost €3.6 billion. We had operating expenses of almost €1.5 billion. When those items are subtracted from the €48.5 billion, we end up with a €5.2 billion surplus and the difference is the tax.
Séamus McGrath (Cork South-Central, Fianna Fail)
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That is included. I just wanted to get a better understanding of that.
One of the criticisms of NAMA is the pace at which it disposed of some of the assets in the property portfolio. Some say it was essentially a fire sale of properties in the early years. NAMA was established in 2009. If we fast-forward to 2016, seven years later, NAMA had disposed of approximately 85% of its assets, if I am accurate. Around €4 billion was left in 2016, for example. What does Mr. McDonagh say to the criticism that NAMA engaged in a lightning sale of assets at a time when property prices had not rebounded? In 2014, for example, there was double-digit growth in house prices, but NAMA continued to dispose of assets at a rapid pace, not maximising the return to the State. That is the key criticism that can be put to NAMA. Will Mr. McDonagh respond to it?
Mr. Brendan McDonagh:
There are a number of things in that. Off the top of my head, approximately 55% of the assets were in Ireland and 45% were outside Ireland. I have heard this criticism and have discussed it at other Oireachtas committees. First, when NAMA acquired the loans, prices were still falling rapidly. Ireland went into a Troika bailout in November 2010. As part of the Troika bailout, the NAMA board had to agree targets with the Government and the Troika for the disposal of assets. We resisted the fire sale of assets, which the European Central Bank, ECB, wanted. The ECB wanted us to sell all the assets in 2010 and 2011, which would have resulted in us only ever getting back approximately €15 billion of the €32 billion.
Séamus McGrath (Cork South-Central, Fianna Fail)
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That pressure was coming from the ECB.
Mr. Brendan McDonagh:
Yes, from the ECB in particular. I was at very testy meetings with the ECB as part of the Troika programme, including one I spoke about here before, where the person from the ECB was arguing with me so much that she stormed out of the room when I would not agree to do what she wanted to do. The reality was that the IMF and European Commission had much more of an understanding that it had to be done over a longer term. We held back the sale of Irish assets. We had to get the market moving and, in the worst of the crisis, which was up to the end of 2012, we only disposed of €1 billion worth of Irish assets. We were trying to get transaction activity moving in the market and trying to find a floor. Every asset we sold had an independent valuation, was openly marketed and-----
Séamus McGrath (Cork South-Central, Fianna Fail)
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I understand that. The point was whether, when the market was beginning to rebound, a decision should have been made to gauge how quickly to release assets to the markets.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I understand. I am sorry for rushing Mr. McDonagh, but I am going to get caught for time.
Mr. McDonagh made the point that pressure was coming at NAMA from external sources, such as the ECB. If that pressure had not been there, does Mr. McDonagh agree that it would have made more sense to hold off on some of the sales?
Mr. Brendan McDonagh:
No. The board was conscious of our doing it the way the board wanted to, in a methodical way, because the weight of the Government guarantee, which left €30 billion hanging over the sovereign, would have severely affected Ireland's ability to get back into the debt market, so we had-----
Séamus McGrath (Cork South-Central, Fianna Fail)
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We needed to bring in money at that time.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Moving on, a further criticism is the way in which NAMA disposed of the assets, with closed sales, and the process that was undertaken. It has been argued that it lacked transparency. There were closed bids in many of the property portfolio sales, for example. It was not truly transparent. What does Mr. McDonagh say to that?
Séamus McGrath (Cork South-Central, Fianna Fail)
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However, when the bids were being made, it was a closed process, was it not? The bidders put in closed bids.
Mr. Brendan McDonagh:
Yes. Usually what happened with the closed bids was that they were to submitted to estate agents or legal firms. We had a policy of being on site when the bids were opened, so we could make sure no funny business was going on. We tried to avoid that. I do not accept that we engaged in any-----
Séamus McGrath (Cork South-Central, Fianna Fail)
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If people are selling a house, an auctioneer will say it now has an offer of €500,000 and asks if anyone wants to go higher. That type of process was not conducted because it was a closed process.
Mr. Brendan McDonagh:
No, but the process was in accordance with market norms and anyone who wanted to bid had an opportunity to do so, if they had proof of funds they could deliver. I do not accept that at all. I have heard a lot of complaints about NAMA over the years, but that is a new one.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I will move on to housing delivery. NAMA originally had a target of 20,000 units. Delivery landed somewhere just under 15,000. Is that correct? NAMA did not achieve its target for direct delivery. While the combined figure for direct and indirect units delivered was 44,500 units, the success rate for the direct delivery target was approximately 75%. What does Mr. McDonagh say about that?
Mr. Brendan McDonagh:
I remember, in 2015, I and the former chairman met the then Minister, Mr. Noonan. Looking at the time and at the debtors that we had, we said we probably could do about 15,000 units. The Minister said he wanted to stretch that target and insisted on 20,000 units. As the Comptroller and Auditor General pointed out, we said this would be very challenging. We pointed that out to the Minister.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Was it too ambitious a target?
Mr. Brendan McDonagh:
The reality as well was that as the market was beginning to recover, in 2016, 2017 and 2018, a number of debtors who we were going to fund to build houses got the ability to refinance themselves out of NAMA, and once they refinanced themselves out of NAMA, we could no longer fund them.
Séamus McGrath (Cork South-Central, Fianna Fail)
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It was out of NAMA's control to respond to it.
Séamus McGrath (Cork South-Central, Fianna Fail)
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The Comptroller and Auditor General points out that between 2011 and 2024, NAMA sold sites which had the potential of delivering 105,000 units and approximately a quarter of those units have been delivered. A further criticism is that NAMA has sold sites to a lot of speculators as opposed to developers who would actually deliver units. Should there have been greater control in relation to that?
Mr. Brendan McDonagh:
No. When we sell an asset, we cannot put any further restrictions on it once it sold as to what somebody is going to do with it. The assets were sold. They were openly marketed and whoever bought them, bought them. Our job, under the NAMA Act, was to get the best achievable return.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I want to move on to staffing within the organisation. In 2014, NAMA had approximately 360 staff. What is it now? In 2024, it was 81.
Mr. Brendan McDonagh:
We were down to 81 people at the end of 2025 but then a load of people left on a redundancy programme at the end of 2025. As of today, there are nine people left in NAMA. Eight of them are going to the resolution unit in the NTMA. I am then the ninth person.
Séamus McGrath (Cork South-Central, Fianna Fail)
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NAMA is down to that level now. Are all the remaining staff to transfer to the NTMA?
Mr. Brendan McDonagh:
Yes. The NTMA has already identified the eight people. They would normally leave on a redundancy programme, but the NTMA needed people with knowledge and expertise to manage the residual activity. It determined that it needed eight people. They are eight good people and they are going to stay on.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Without getting too personal, does that include Mr. McDonagh?
Séamus McGrath (Cork South-Central, Fianna Fail)
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When NAMA had high numbers of staff, what was the average salary paid to staff within the organisation?
Séamus McGrath (Cork South-Central, Fianna Fail)
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When NAMA had 360 people, the average salary was €100,000.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I am not casting any aspersions here but in relation to ethics, probity, integrity and so on, obviously hundreds of staff left NAMA over the years. I presume a high percentage of them went on to work within the property sector. Is it fair to say a number of them would have engaged with NAMA after leaving the organisation?
Séamus McGrath (Cork South-Central, Fianna Fail)
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Is Mr. McDonagh satisfied that there were safeguards in place that they were not in a position to use any information they would have gained from their time in NAMA for commercial benefit?
Mr. Brendan McDonagh:
We did as much as we could reasonably do. Certain things came up in the public accounts committee back in the early years and NAMA and the NTMA implemented them. The first was that staff were already under a lifelong confidential obligation, and it is a civil offence to breach that if they are found breaching it. The second is that when staff leave the organisation they have to give an undertaking not to use any information for any other purpose. Again, if they do so, they would have to deal with the Garda on that. The third thing we did on the recommendation of the committee in the early years was that we introduced gardening leave provisions for staff after they left to provide that they could not just walk out the door, jump over the fence to the other side and come in the following day.
Séamus McGrath (Cork South-Central, Fianna Fail)
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There were cooling-off periods.
Séamus McGrath (Cork South-Central, Fianna Fail)
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How long were they, in general?
Séamus McGrath (Cork South-Central, Fianna Fail)
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I will leave it at that. I thank Mr. McDonagh and Mr. Carville for their answers. They are much appreciated.
Paul Murphy (Dublin South West, Solidarity)
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I thank the witnesses for coming before us. In his opening statement, Mr. McDonagh cites a very positive balance in terms of NAMA delivering on its commercial mandate and so on. One of the objectives set out in the NAMA Act was "to contribute to the social and economic development of the State". Has NAMA achieved that?
Mr. Brendan McDonagh:
In the way the NAMA Act was structured, that was in an objective of the Act, but the objectives of NAMA, which were set out in a separate section of the NAMA legislation, was about being commercial and getting the best achievable return. As a board, we did not ignore the social contribution. We did as much as we could. We engaged on social housing. We offered 7,500 units for social housing. Unfortunately, a lot of them were not accepted by the local authorities. We also did lots of other things. We provided playing pitches, sites for schools and public parks and met whatever other obligations were on us. We did as much as we could reasonably do, but we had to be mindful of what the Oireachtas said to us. Our obligation, the first and only obligation of NAMA itself as opposed to the Act, was to be commercial.
Paul Murphy (Dublin South West, Solidarity)
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On social housing, why were so few of the units that were offered to local authorities bought?
Mr. Brendan McDonagh:
That always astounds me in terms of the amount that was offered. First, it took a very long time for the local authorities to come back on a lot of those offers and when a lot of them came back, some of the units had already been sold. At other times, reasons given to us were that they were not in suitable locations, the local authority already had too much social housing in that particular area or they were not the right fit. We might have had a lot of apartments and the local authorities said they did not want apartments, they wanted three-bedroom houses. Other times, we would offer four-bedroom houses and they said they did not want four-bedroom houses, they only wanted two-bedroom houses. There were are sorts of reasons given and I have enunciated those at the committee many times. I suppose when everybody looks backs now, we say it was a missed opportunity. All we could do was offer them and the Housing Agency at the time and the local authorities took the decision not to take them.
Paul Murphy (Dublin South West, Solidarity)
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In any case, did NAMA sell them on the open market when engagements were ongoing with local authorities? Mr. McDonagh mentioned that when NAMA was waiting for the local authorities to come back to it, NAMA sold them.
Mr. Brendan McDonagh:
Yes, but the reality is that NAMA has an evolving portfolio and debtors have the right to sell their assets if they want to try to pay down the debt. I am not talking about a delay of a week or two. Some of them did not come back to us for between 18 and 24 months.
Paul Murphy (Dublin South West, Solidarity)
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To turn to where I think NAMA failed fundamentally in any kind of social objective is that I think NAMA contributed to the housing crisis that we are currently experiencing. We went from a situation where NAMA at some stage, according to some estimates, had 70% of potentially developable residential land in the greater Dublin area and most of this went to speculators who did not build it, or certainly have not built on it up to this point.
NAMA had a target of 20,000 direct-build properties. Mr. McDonagh said that was too optimistic. In response to that, he said NAMA did 14,000 or so direct builds and then it did a bunch indirectly. Can Mr. McDonagh explain the rationale of claiming credit for the indirect development? In what sense is it indirect? Is this simply land that NAMA previously and which a developer has and then builds on? NAMA does not provide any money for it and does not have any input into the project.
Mr. Brendan McDonagh:
That is actually not true. During those years when the developers had the land in NAMA, we funded things like infrastructure within that land. We funded planning permissions when debtors were seeking planning permission because anything that was going to improve the value of land would help us to realise more for it. The land was sold. When somebody buys it, what are they going to do with it? I cannot determine, no more than the Deputy can determine, what somebody does with it. There are all sorts of reasons land is not build on. One of the big debates at present is on zoning more land. I am a big supporter of zoning more land but the reality is that zoning more land does not solve the problem unless you have got the infrastructure within it and you can get planning permission on it.
Paul Murphy (Dublin South West, Solidarity)
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And unless speculators do not want to just sit on it to let the value rise and rise.
Paul Murphy (Dublin South West, Solidarity)
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What I am getting at is in a way the agency is trying to have its cake and eat it in that where it sold land and houses were subsequently built it wants some credit. I do not mean Mr. McDonagh but NAMA as an organisation. The agency claims them as indirect builds but then it says the 75% of potential building that has not happened on these is nothing to do with it. How can NAMA do both at the same time? It is claiming credit for the indirect builds while saying it is not its fault if most of the units that could have been developed were not.
Mr. Brendan McDonagh:
The difference is more defined than that because any of the indirect builds were generally built by debtors who were in NAMA previously who we supported to build on that land, whereas the land that was sold was sold to third parties. The Deputy can talk about us having our cake and eating it but I do not accept that. We have followed the sites as much as could to see what happened after the debtor left NAMA, if he refinanced after NAMA. The stuff that was sold to third parties might have been sold on to other third parties afterwards. At the end of the day, we have a national housing crisis and everybody accepts that. As I sit here, am I happy with the fact that if we did not do what we did, there would be 44,500 fewer houses out there for people to live in if we did not support them-----
Paul Murphy (Dublin South West, Solidarity)
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No, there would be many more houses if the agency had not done what it did. It sold the land to speculators, as Mr. McDonagh said, who sat on it and did not build anything. The real figure for indirect builds is a negative figure when looking at the potential land. What if NAMA had been used - I think part of this was a policy - to say we have a coming housing crisis, we have all this land and we are going to build houses on it?
Mr. Brendan McDonagh:
All right, but at the end of the day, debtors who had this land wanted to sell their assets to repay debt. We made sure they got the maximum price they could for that to help them repay as much debt as they could. As I said in reply to Deputy McGrath, we also had targets to meet to generate cash to pay down our senior debt so we could get rid of the burden on the sovereign, which was trying to issue debt to the market. You cannot have it every way and say we should have held on to this or done that. We had a job to do and we did it the best way. We took the best decisions we thought were the right ones at the time. Any of the land that was developable and where the debtor was working with us and was a housebuilder, we provided funding to build out those houses. We provided funding to put infrastructure in to make it possible to deliver residential houses on it. At the end of the day, there is only so much NAMA or any organisation can do but the-----
Paul Murphy (Dublin South West, Solidarity)
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The effects of the agency's action has been to dramatically worsen the housing crisis by enabling a small pool of vulture funds to sit on huge tracts of land and not build on them for ten years. Robert Sweeney, the TASC economist, wrote:
... the NAMA ... disposals resulted in speculative land transactions which lengthened and slowed the development supply chain, contributing to Ireland’s housing supply problems. [...] land speculation has been a contributory factor to Ireland’s housing problems in recent years. The residential land market was very speculative post-NAMA disposals.
There are loads of these observations in his report.
Paul Murphy (Dublin South West, Solidarity)
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Mr. McDonagh does not.
Paul Murphy (Dublin South West, Solidarity)
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That is not a refutation of that. One could say what Mr. McDonagh just said and agree with Robert Sweeney, but Mr. McDonagh is saying he does not agree. Why not?
Paul Murphy (Dublin South West, Solidarity)
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No, but does Mr. McDonagh accept the NAMA disposals resulted in speculative land transactions that lengthened and slowed the development supply chain?
Mr. Brendan McDonagh:
You could say that about any asset class. You could say that about hotels, which was a NAMA portfolio. You could say that about commercial buildings, which were in the NAMA portfolio. Constitutionally, once people buy a property, they can do with it what they want. If the government wants to encourage different behaviour, it can use policy mechanisms to deal with it. It does not matter whether AIB still had those loans or Bank of Ireland still had those loans or NAMA ending up with them, it is the same point. At the end of the day, people will do with property what they are going to do with property. Neither us nor the original lenders can really force them to do anything an owner of a property does not want to do.
Paul Murphy (Dublin South West, Solidarity)
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I have a final question. Has Mr. McDonagh anything to say to tenants in Spencer Dock who are being evicted? The liquidators, Grant Thornton, have served the tenants eviction notices on grounds of sale because it wants vacant possession to, it says, maximise the return to NAMA.
Mr. Brendan McDonagh:
It is not to maximise the return to NAMA because a liquidator is appointed by the courts and his job is to maximise the return to all creditors. NAMA is a creditor of Treasury Holdings and Treasury Holdings was put into liquidation back into 2014, I believe. Grant Thornton is there and it has assets, The liquidation is going on since 2014 and it is now 2026. At the end of the day, the liquidator has got to do what he has got to do. He is not doing it on the instruction of NAMA, he is not doing it on behalf of NAMA; we are just one of the myriad creditors of Treasury Holdings and whenever the liquidation finishes, a distribution will be made to NAMA on the back of it.
Paul Murphy (Dublin South West, Solidarity)
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I thank Mr. McDonagh.
Joanna Byrne (Louth, Sinn Fein)
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I will stick with that topic. I fundamentally agree with a lot of what Deputy Murphy said.
It is important to acknowledge NAMA had a major footprint in Drogheda, where I come from. It managed and funded a lot of developments that were in huge difficulty, notably phase 2 of the Scotch Hall Shopping Centre, which has seen a new eight-screen cinema, restaurants and additional retail spaces. A lot of the apartments were sold to Tuath Housing, and this meant many people we were working with over many years acquired homes. I wanted to acknowledge that little bit of positivity.
Coming back to the identification of properties that were potentially suitable for social housing, up to the end of 2024 - and I am open to correction on the figures - there were over 7,500 residential properties identified as potentially being suitable for social housing but only 39% of these were taken up by local authorities. The local authorities in Louth, where I come from, and Monaghan, where Deputy Bennett comes from, had two of the highest uptakes in this regard. I believe six counties did not take up any of these properties at all. Was there a reason given for this or was there a trend the agency could identify across those six counties?
Mr. Brendan McDonagh:
I am sorry but I do not have the detail on those six counties with me. I can come back to the Deputy if she wishes. The general trend was the local authorities were saying the properties we were offering were not suitable, not the right type and that they already had an over-concentration of social housing. They were the predominant reasons. We could not force them to take them, as the Deputy will appreciate. We did offer them. As I said, it has always surprised me they did not take them given the issue that has evolved but at the end of the day, that is for the local authorities and the housing agencies to answer. The County and City Management Association has been before the housing committee in previous years and has said the properties were not suitable and that they were in half-built developments and unfinished housing estates. However, there were almost 1,500 unfinished housing estates in Ireland when NAMA started in 2010. We had 335 of them. We resolved all of those. We finished off those developments by funding units, so effectively if the local authorities said they wanted them, we would have funded them and if they did not want to buy them themselves, we would have bought them, as we did, put them into NARPS and done a lease with the local authority or AHB. We did that for 1,366 units. It is more a question for them than for me. I was very disappointed they did not take up more but I could not force them to.
Joanna Byrne (Louth, Sinn Fein)
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NAMA had previously set a target of delivering X number of social housing units by the end of 2015, which it met. However, the agency did not set further delivery targets after 2015. Was there a particular reason for that?
To tease that out a little bit further, not only were definitive targets not set after 2015, but there was very little communication on the properties NAMA was currently identifying as the years went on. That information seemed to be slow in disclosure.
Mr. Brendan McDonagh:
No. We constantly engaged with the Housing Agency all the way through our life. It came in and looked out our portfolio. In fact, it sent one of its employees into our office. He was in our office for a number of months. We constantly engaged with the agency, which was the liaison with the local authorities. The problem was that we inherited completed and incomplete stock back at the start of 2010. As those items were being sold into the market and taken up by the approved housing bodies and local authorities, effectively that portfolio disappeared. From 2015 onwards, we were funding developers to build out new stock. As part of that, they had Part V obligations. Some 10% of the new stock we were funding was going to local authorities and AHBs as a matter of statutory obligation. That is how we were delivering the stock.
The problem was that the original stock we acquired was dwindling the whole time. Once that was dwindling, there was less to offer but we engaged constantly with the Housing Agency about what we had on our books and asked if it was interested in these. It became fewer and fewer and it said there was no demand for those particular things but there was clearly demand for the new stock because it was part of the Part V obligation.
Joanna Byrne (Louth, Sinn Fein)
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I know it has been teased out already in relation to the properties. I think there were 2,184 units sold or let on the open market by NAMA debtors and receivers during periods of engagement with the local authorities and the voluntary housing bodies. I get the reasons Mr. McDonagh set out to my colleague earlier on but, in hindsight, was that a mistake? Does he believe it would have been better purposed or better served to not move on selling those properties while NAMA was in a period of engagement with the local authorities, considering the housing crisis that was starting to unfold at that time?
Mr. Brendan McDonagh:
As I said in reply to Deputy Murphy, this was not us offering it on Monday and saying, "If you do not come back to us by Friday". We engaged on a lot of those ones for 18 to 24 months. The reality was that the portfolio was moving the whole time. Some of them had been sold or rented to the private sector by the debtors. We held onto them for as long as we reasonably could and probably longer than we should have in some instances. The slow pace of response was really shocking to me at the time but, at the end of the day, I was not the person in the local authority who had to decide whether they wanted the units or not.
Joanna Byrne (Louth, Sinn Fein)
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Was it a case that they had to decide or would it have been a case of trying to free up funds?
Mr. Brendan McDonagh:
No. We said we would buy them into our social housing vehicle, NARPS, which we transferred to the Land Development Agency, LDA, in 2025 and we would do a lease with the AHBs and the local authorities. They did not have to actually find the capital funding at all. It happened in a number of properties where they said the property was built by the developer and needed a bit of funding to do additional things. A number of things were requested, like footpaths, improved drains and things like that. We funded all that remediation work. The reality was that the stock we inherited was built to housing standards, whatever they were, back in the mid-2000s but by the time we leased them, we got them certified up to the standards that existed in 2013, 2014 and 2015. The quality of the product that was being made available was really high.
Joanna Byrne (Louth, Sinn Fein)
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I am not sure but Deputy McGrath might have asked this in his opening contribution. The agency is a wind-down process and coming to the end of the setup. Does he believe that NAMA achieved the best financial return for the State in all of its transactions that were carried out? Can Mr. McDonagh stand over that wholeheartedly?
Mr. Brendan McDonagh:
I do stand over it wholeheartedly. I was there from the very start. I knew the crisis the country was in and I made a commitment that I would honour and try to achieve that section 10 obligation under the NAMA Act to the best of my ability. I can honestly say - and I will stand over it - that I believe whatever price we got for every asset was the best price we could possibly get at that point in time in the market. Everyone can have hindsight and say we should have done something else at a different time but we did not have that luxury. We had to deal with whatever the facts were at that point in time and get the best price. If I was not getting the best price, Mr. McCarthy and his team, as is their right, would have found it, I am sure, and reported it to the committee.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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The witnesses are very welcome. Looking back on the past 16 years, as he said, Mr. McDonagh was there from the very start. Under his leadership of NAMA, how would he have handled it differently today? Does he believe there were any governance changes or anything he would have thought was necessary for any new State agencies coming on board? Has he made any recommendations to the Minister for going forward or to the NTMA to avoid controversies that happened under his watch in relation to Project Eagle, loan disposals and transparency?
Mr. Brendan McDonagh:
We had a legislative remit to deliver, which I believe we have delivered. I said this at a meeting of the Committee of Public Accounts a number of years ago. Back in 2018, Department of housing officials came in to discuss with me forming what they called at the time a national regeneration agency, or whatever the case was. We subsequently had a discussion about it and I gave them some ideas. They went off then and it ultimately became the LDA. A number of people who worked in NAMA are in the LDA and they are very good people.
In regard to NAMA itself, we had a job to do. The biggest job was to pay down the debt, get rid of the Government guarantee and then try to generate a surplus. In the early years, people were speculating that we were going to lose €10 billion or €12 billion. We have not done that, obviously; we have turned it the opposite way around. There might have been an opportunity in 2016 or 2017, if the Government wanted, to repurpose NAMA. It decided not to. It decided in 2018 to go with a new organisation, the LDA, and that was fine. That was the Government's prerogative.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Does Mr. McDonagh believe it should have done something different?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I am just asking Mr. McDonagh for his recommendations, as the agency is closing.
Mr. Brendan McDonagh:
On my personal opinion, I am happy that a number of people who were in NAMA continue to work in the public sector and have brought that expertise to the LDA. That was a Government decision. Government policy was not my bailiwick.
The Deputy mentioned Project Eagle. The commission of investigation was very expensive and lasted seven years. The reality - the commission said it, but it did not have to say it - was that they were not asked but if they was asked, they could not but conclude that we got the best achievable price for the portfolio. That was independent and run by a High Court judge for the majority of the time. I am happy that was vindicated. At the end of the day, NAMA was in a position where we did not have the luxury of sitting around. We had to make decisions and anybody can look back and say we should have done something differently. That is their prerogative.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Is there anything Mr. McDonagh feels he should have done differently?
Mr. Brendan McDonagh:
No. I honestly think that we tried to do everything we did at each point in time based on the best information we had available and tried to make the best decisions we could for the right reasons and acting in the best interests of the State. There was no personal benefit to anybody and it was all about trying to do the right thing.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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What is the current status of NAMA's subsidiary operations?
Mr. Brendan McDonagh:
There is only one subsidiary left in NAMA. We had a particular type of structure and they have all been liquidated, so we are now just down to one subsidiary called National Asset Loan Management.
That will transfer to the NTMA. It will become a subsidiary of the NTMA under the wind-up legislation.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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What is that called?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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What about National Asset Residential Property Services?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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When did that happen?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Why did NAMA use the section 110 tax structure?
Mr. Brendan McDonagh:
When NAMA was set up, it was regarded as a market operator under EU state aid rules. There were other non-NAMA banks in the market, such as Ulster Bank, KBC Bank and Bank of Scotland (Ireland) at the time, and those other market operators made submissions that unfair competition could not be allowed in the market. Therefore, we had to operate on a tax equivalent basis, as any other operator in the market had to. We set up section 110 companies to operate on a tax equivalent basis and this was an obligation under the EU state aid-----
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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What incentives did that give NAMA?
Mr. Brendan McDonagh:
It was used by everybody up until 2016 effectively as a tax shelter. For NAMA, it meant nothing because the Minister ultimately owned NAMA. You were either paying it in tax or giving it back to the Minister in the form of a surplus. Since 2016, we have paid €450 million and section 110 has been curtailed for everybody, including NAMA. We have paid €450 million in corporation tax that we would not have paid before the law was changed. We had to operate in the same way as everybody else in the market.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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NAMA did not have to pay VAT.
Mr. Brendan McDonagh:
We did. We were subject to all the same tax as everyone else in the market. Section 110 was a mechanism for companies that had loans. Those loans could be put through vehicles as profit participating loans and the tax bill would be reduced. NAMA had to do that to be equivalent to the market. The reality was that it did not matter to NAMA and the Minister because the Minister would get the money from the Revenue Commissioners or from NAMA. It was only a circular movement of money. It just meant we had to be tax equivalent. That was the European Commission-----
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Would NAMA pay capital gains tax on properties where it made money?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I want to talk about staffing. Mr. McDonagh said earlier that the 369 staff who were employed in 2014 are nearly all gone.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Where are those other eight people going to go now?
Mr. Brendan McDonagh:
Those eight have been identified by the NTMA to go to the resolution unit, which is the wind-up vehicle for NAMA and IBRC. I am the ninth person.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Last year, Mr. McDonagh was offered the job as housing activation officer. Is that correct?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I do not know, so I am just asking.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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A Fianna Fáil Minister asked Mr. McDonagh to do that job.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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It came out in the papers afterwards that Fine Gael did not know about it. I am asking.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Okay. What happened to the job? Is it gone?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Will he be on the same salary as Mr. McDonagh was going to get?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Where is Mr. McDonagh going to go after this? Is he going back into the NTMA?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Did Mr. McDonagh's salary go up to do NAMA?
Mr. Brendan McDonagh:
It did. Everybody knows that. After I finish with NAMA, I have the right to return, as anybody on secondment from any Government body has. I am going back to the NTMA at a level equivalent to that I left in 2009.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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What will Mr. McDonagh's role be?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Is there a role? Will a role be made up?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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It is interesting to see that the NTMA can just come across a role to slot Mr. McDonagh back in. That is interesting.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Will that be additional-----
Mr. Brendan McDonagh:
I did a job. I went into a job to do a job. When NAMA started, I did not know whether it would last for one, two or ten years. I did not expect it to last for 16 years. I went into the job on the basis that I had a right to return, however long it took. When NAMA concludes, I have a right to return.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I thank Mr. McDonagh.
John Brady (Wicklow, Sinn Fein)
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I have a number of questions. I will continue from the questions about Mr. McDonagh's role. Many of the transfers back to the NTMA are going to take place at the end of this month, in terms of some of the outstanding issues within NAMA. The agency will be wound down completely at the end of this month. That is what Mr. McDonagh is saying. There are roles for the other eight personnel who Mr. McDonagh mentioned but as yet no role has been identified for him as he goes back into the NTMA.
Mr. Brendan McDonagh:
The other eight people are going to manage the residual NAMA and IBRC activity.
John Brady (Wicklow, Sinn Fein)
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Mr. McDonagh said he will be going back into the NTMA at the same scale he was on when he left. He was the CFO.
John Brady (Wicklow, Sinn Fein)
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The pay scale he is on now has been widely reported, and I ask him to correct me if I am wrong, as €430,000.
John Brady (Wicklow, Sinn Fein)
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Will Mr. McDonagh maintain that pay level when he goes back-----
John Brady (Wicklow, Sinn Fein)
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He will not. He will go back in at the CFO level.
John Brady (Wicklow, Sinn Fein)
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What is the pay scale for that job?
John Brady (Wicklow, Sinn Fein)
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Will there be bonus entitlements?
John Brady (Wicklow, Sinn Fein)
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Mr. McDonagh has waived bonus entitlements in his role as chief executive.
John Brady (Wicklow, Sinn Fein)
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Will Mr. McDonagh continue to waive bonus entitlements into the future?
John Brady (Wicklow, Sinn Fein)
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It is just a question. We are three or four weeks out from Mr. McDonagh going back into the NTMA and nobody knows what role he is going to be taking on.
John Brady (Wicklow, Sinn Fein)
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I want to touch on the ongoing litigation cases. There are eight cases there. Are those cases that were initiated by NAMA or are they cases being taken against NAMA?
John Brady (Wicklow, Sinn Fein)
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Are they long-standing or new cases?
John Brady (Wicklow, Sinn Fein)
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One of the cases is 13 years old.
John Brady (Wicklow, Sinn Fein)
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That involves considerable legal expenditure. Is that a case taken by NAMA or against NAMA?
Mr. Brendan McDonagh:
It is a case taken by somebody against NAMA. It was dormant for a number of years and it resurrected in recent years.
John Brady (Wicklow, Sinn Fein)
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Do we have sight of the legal costs of those eight ongoing cases?
Mr. Brendan McDonagh:
Like all litigation, it depends on how long the case runs, court directions on discovery and court directions on when hearings happen.
It is not a huge amount. Like all litigation, I think it is a waste of money. I always encourage people to settle, which we try to do in these things, but sometimes people will not settle. I am not really concerned about any of those four cases against us. Even though one of them has been going on for a long time, it is a matter of principle.
John Brady (Wicklow, Sinn Fein)
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Mr. McDonagh is not concerned, but I would be concerned from a taxpayers' perspective. A legal case going on 13 years-----
John Brady (Wicklow, Sinn Fein)
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I am not questioning the motivation. I would be interested in getting a line of sight on the legal expenditure on those cases, particularly the one going back 13 years, which is a lengthy process that is inevitably going to continue once NAMA-----
John Brady (Wicklow, Sinn Fein)
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The witness might furnish those details to the committee on the potential liabilities for the State.
Mr. Brendan McDonagh:
As I said, I do not believe we have any potential liabilities, but at the end of the day the courts will decide. Based on our legal advice, we do not believe in liabilities but we have to deal with the four cases being pursued against us. At the end of the day, the courts are courts and they will make their own decisions.
John Brady (Wicklow, Sinn Fein)
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Are any of those litigations seeking to block the dissolution of NAMA?
John Brady (Wicklow, Sinn Fein)
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Okay. Going right back to the early days, it was widely reported that nearly all of NAMA's top 30 developers had shifted assets into their wives' hands, and they were given the term "The Wives Club." The witness mentioned four of those cases involved assets that may have been moved elsewhere to protect them. Are any of those cases related to assets that have been moved to family members? I am not asking for specifics.
Mr. Brendan McDonagh:
There is one case we are pursuing where we believe there were asset transfers, as the Chair called them, to a spouse who was not a NAMA debtor. We are pursuing that.
John Brady (Wicklow, Sinn Fein)
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Does Mr. McDonagh know the value of the assets, or can he give any detail on that?
John Brady (Wicklow, Sinn Fein)
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Regarding former staff members of NAMA, Mr. McDonagh said that there was a three-month cooling-off period for ordinary members who left the organisation before they could take up a role that may have involved a conflict, and a six-month cooling-off period for senior members of staff. What was considered senior, and how was that determination made?
Mr. Brendan McDonagh:
The board and I sat down and worked out that the senior people were those who were members of the executive team and reported to me. Of course, they would have had access to most of the information on what was going on in NAMA because we discussed everything at our executive team meetings. They were the people designated to have a six-month period, and anyone below that level was designated to have a three-month period.
John Brady (Wicklow, Sinn Fein)
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Was that contained in contracts?
John Brady (Wicklow, Sinn Fein)
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Were there any cases of those cooling-off periods being breached, or were there any requests to the Department or elsewhere for those cooling-off periods to be lifted?
John Brady (Wicklow, Sinn Fein)
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There were no concerns there.
Mr. Brendan McDonagh:
The board and I would be the first to recognise that as a public body, you have to be alert to these things. We try to avoid any of these difficulties. We also tell people that if they turned up on the other side, we would effectively advise that even if the three months were up - for argument's sake - they should not be very involved on the other side and there should be somebody else in their company who could deal with the matter, rather than themselves.
John Brady (Wicklow, Sinn Fein)
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Did it not cause some discomfort for Mr. McDonagh and other senior people that a considerable number of NAMA employees went on to work for some major property developers, and some of those individuals negotiated the sale of sites at knock-down prices to companies they were then working at? I am sure that caused some level of discomfort.
Mr. Brendan McDonagh:
I do not accept that we allowed these people to negotiate sales at knock-down prices; we certainly would not allow that. At the end of the day, we have taken a pragmatic approach to these things and we have put in as many guardrails as possible. Many of these people came into NAMA from the property industry in the first place, and we made good use of their skills and they were very important. After several years, and as the property market improved, some left because they wanted to leave, or they resigned and did not take redundancy but left anyway. We are very alert to where people went and if they are on the other side of the transaction, we try to put up as many guardrails as possible. In fairness, in my experience, people have respected and understood that no individual wants to be named in a public forum such as this or anywhere. People recognised that we had rules for good reasons.
John Brady (Wicklow, Sinn Fein)
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I have one other question. There is one remaining foreign-based asset that is on the books. Mr. McDonagh might give us some detail on that if he can.
Mr. Brendan McDonagh:
Yes. I have spoken about it before. It is the side of a mountain in Macedonia. Under Macedonian law, there is no concept of receivers. We have gone through several years of trying to find a mechanism for how we could dispose of this asset. You have to go through a state bailiff. Macedonia is not part of the European Union. For many years, there were concerns about Macedonia because of AML legislation, but now it has come more into line with the European Union and its banking system has been accepted as part of that. We have finally got through the AML checks and balances with our compliance department. The bailiff is in the process of preparing that asset to put it into public auction. That is the way they do it in Macedonia. It will sell over the next six to nine months.
John Brady (Wicklow, Sinn Fein)
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Is there an estimated value on that?
John Brady (Wicklow, Sinn Fein)
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What was its purpose? Was it supposed to be a vineyard or something like that?
Mr. Brendan McDonagh:
No, I believe the plan at one stage, which never came to fruition because of the financial crisis, was to dig into the side of the mountain and build a hotel overlooking the ocean. It would have been very expensive. The debtors who borrowed the money against that had a big dream, which is the only way I could put it. We have to deal with it anyway as the last remaining asset.
John Brady (Wicklow, Sinn Fein)
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We hope there will be a resolution on that.
John Brady (Wicklow, Sinn Fein)
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It will not achieve the value on it. What was it initially?
John Brady (Wicklow, Sinn Fein)
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That concludes my questions, so I will open up the floor for a second round of questions, with Deputy McGrath first.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I thank the Chair for the remaining couple of minutes.
Picking up on the theme relating to assets outside of this jurisdiction, I think Mr. McDonagh said at the outset that it is was 55% of assets-----
Séamus McGrath (Cork South-Central, Fianna Fail)
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-----within and 45% outside. How many countries were involved in total?
Séamus McGrath (Cork South-Central, Fianna Fail)
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What were the countries that would surprise you in terms of far-flung destinations? The witness obviously mentioned Macedonia.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Did they ever go as far as Australia or New Zealand?
Séamus McGrath (Cork South-Central, Fianna Fail)
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What about Asia?
Séamus McGrath (Cork South-Central, Fianna Fail)
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They are all resolved with the exception of the Macedonian property. Going back to 2009, did NAMA have to pay dereliction levies on properties to local authorities?
Séamus McGrath (Cork South-Central, Fianna Fail)
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Did debtors have to pay?
Séamus McGrath (Cork South-Central, Fianna Fail)
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Some of the properties not under NAMA control but that were part of the debtors with NAMA would have had to pay. Does Mr. McDonagh have any idea-----
Séamus McGrath (Cork South-Central, Fianna Fail)
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In terms of recoupment from assets, in some cases dereliction levies would have had to come off. Does Mr. McDonagh have a quantity for that?
Séamus McGrath (Cork South-Central, Fianna Fail)
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I understand.
Séamus McGrath (Cork South-Central, Fianna Fail)
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What probably is not a small figure is the legal fees. I am sure many of the cases ended up in the courts. What scale of legal fees did NAMA incur over the years? Can Mr. McDonagh give us some sense of that?
Séamus McGrath (Cork South-Central, Fianna Fail)
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I think the C and AG wants to come in.
Séamus McGrath (Cork South-Central, Fianna Fail)
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NAMA had a number of legal firms on its books. Was it a small number or a large number? Was it dealing with similar legal firms?
Séamus McGrath (Cork South-Central, Fianna Fail)
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No, the figure of €72 million the C and AG provided gives an overall sense of it. I want to ensure there was competition in that sector in the procurement of legal services.
Séamus McGrath (Cork South-Central, Fianna Fail)
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How many debtors in total did NAMA deal with?
Mr. Brendan McDonagh:
It was not far off 800. Some of them were split into sub ones. We generally regard it as close to 800. We took some debtors in and split them off into individual connections from being grouped with the other ones, so about 800. There were about 5,000 borrowing into these, which is like SPVs.
Séamus McGrath (Cork South-Central, Fianna Fail)
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In terms of the 800 or thereabouts, in terms of legal entities, they were by and large companies, as opposed to private individuals.
Séamus McGrath (Cork South-Central, Fianna Fail)
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We know some debtors came through NAMA and continued to trade successfully, while others did not. What percentage of those debtors came through as trading entities, effectively?
Séamus McGrath (Cork South-Central, Fianna Fail)
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It is not a judgment on NAMA's success or otherwise but just to give us-----
Séamus McGrath (Cork South-Central, Fianna Fail)
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If a debtor cannot continue to trade it is-----
Mr. Brendan McDonagh:
In terms of the overall book, 59% of debtors who came into NAMA just dealt with commercial property, 11% were house builders and about 30% were housebuilders who also did commercial property. One of the things I looked at before I came in here, because I found it interesting, was that of the 11% who were housebuilders, 87% survived.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Okay, that is of the pure housebuilders.
Mr. Brendan McDonagh:
Yes. Of the 30% who were housebuilders and also did commercial property, almost two thirds survived. The reason I did the statistical analysis was people say NAMA ruined the construction industry. We did not. That shows we supported the construction industry. More people emerged out of it and survived - and good luck to them - after being through the NAMA process. I would be the first to say these debtors did not want to be in NAMA. They wanted to get out and get back to normal operations, and they have.
Séamus McGrath (Cork South-Central, Fianna Fail)
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From NAMA's point of view, those are positive figures. Of the 11% that were housebuilders, 87% continued to trade, and of the 30% who combined housebuilding with commercial property, two thirds survived. The ones, largely speaking, who did not were on the commercial side. Is that fair enough?
Mr. Brendan McDonagh:
On the commercial side, and there was a number of debtors in both of those categories who, I believe, could have survived but just would not co-operate with us. They decided they did not want to deal with NAMA. They preferred to go into receivership than to engage. I know one major guy because he came to me afterwards. He litigated against us and he met me afterwards and said he had made a huge mistake. He is not back in the business now. He said he sees all these guys back in business and that he should have swallowed his pride.
Séamus McGrath (Cork South-Central, Fianna Fail)
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He should have worked with NAMA. On a personal level, I thank Mr. McDonagh for his service. He took on a colossal job back in the day. It was not easy, very complex, very intricate and involved a lot of public service involved. I wish him well in his new role. I think Mr. Carville is staying with us so we will not wish him well at this stage.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I want to go back to the question of how much in assets NAMA had on its books over the years.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Yes, buildings. What was the monetary value?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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And then NAMA sold those on, that €32 billion.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Did NAMA never own the assets?
Mr. Brendan McDonagh:
The way I would describe it would be if you bought a house and got a mortgage from Bank of Ireland, I do not think you would regard Bank of Ireland as owning the house. You would regard yourself as owning the houses and having a loan with Bank of Ireland. It was the same thing with these debtors. That is important for people to understand. They regarded it as having loans with the banks while owning the assets. They were trying to use those assets to pay back their debt.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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What happened the assets?
Mr. Brendan McDonagh:
At the start, we engaged with them, they produced business plans and we examined those business plans and came up with a strategy for those who wanted to work with us for disposal of those assets over time, or they got funding from us to build out or to complete and sell them. That is what happened over the life of NAMA. Debtors who worked with us came out the other side. That is based on the statistics I gave Deputy McGrath. For the ones who did not, receivers were appointed and then they disposed of the assets and used that money to pay back the debt as much as possible.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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That was just a query for clarity. Good luck to Mr. McDonagh in his new post.
John Brady (Wicklow, Sinn Fein)
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I have a few concluding questions. I will turn to an issue in my constituency of Wicklow.
I appreciate Mr. McDonagh might not have the details with him but he can furnish them to me. This relates to what was the former Bray Golf Club lands that ended up in NAMA. They eventually came out of NAMA. Deloitte were appointed as receiver and Ballymore has it again and is developing the site. A number of commitments from NAMA were given as recently as September 2018 regarding that site. There was a commitment to fund up to 25% of a transport bridge over the River Dargle. Where does that commitment lie? Has that commitment crossed over to Ballymore’s responsibility? There was also a reference to contributing to the Dublin Road improvement scheme in the local area. I appreciate Mr. McDonagh might not have the minute detail to hand.
Mr. Brendan McDonagh:
I know the site the Chairman is talking about. The receiver would have entered into discussions with the local authority as part of an overall submission of a planning application or whatever around that site. When the site was sold, those would have transferred with the site to the purchaser, which in this case turned out to be Ballymore, after we marketed it. That would then be a discussion between Ballymore and the local authority on the issues around the bridge and road. It would not have been a direct commitment from NAMA. It would have been a commitment by the receiver on the part of his looking for planning permission at that stage to improve the value of the site that there would be these obligations as part of getting the planning permission. That would rest with Ballymore.
John Brady (Wicklow, Sinn Fein)
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No commitments were given by NAMA per se.
Mr. Brendan McDonagh:
No. The receiver would have been doing that as part of his legal obligation to try to maximise the value of the site. He would be trying to get planning on the site and he would be engaged with the local authority as part of that. The local authority would make it part of the conditions of planning that the developer would have to fund the road and fund the bridge. That would not have been directly by NAMA. It would have been by the receiver.
John Brady (Wicklow, Sinn Fein)
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I am informed that a letter was issued by NAMA dated 24 September 2018, which mentions NAMA's contribution covering both the Dublin Road improvement scheme and the bridge. That correspondence supports-----
Mr. Brendan McDonagh:
I am not aware of that specific letter. If the Chair says the letter exists, it exists; I take his word for it. However, in terms of anything we would have done, receivers would sometimes ask us to give support to their obligation. Obviously, if the receiver got planning and was going to build out on it and the site was not sold, the local authorities would sometimes have asked for letters of support from receivers but I have not seen the specific letter. That would have happened with local authorities where, to try to get sites moving, we would say if we still owned the site, and we were going to build on it and had planning permission, we would fund whatever the obligations were set down by the planning authority.
John Brady (Wicklow, Sinn Fein)
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That site was very problematic, as are a number of others. Part of that site is on a flood-plain for the River Dargle. What way does that feed into any deliberations?
Mr. Brendan McDonagh:
It would. Within NAMA we employed three planners. Part of their work was to engage with each local authority in relation to any planning applications that could be done on site. We had a policy of being straight up with local authorities on the basis that while they were promised and told lots of things by developers pre-NAMA whereas we always went and talked to local authorities. If we knew it was on a flood-plain, we would tell the local authority that we were not going to pay money for a planning application to build on a flood-plain. There would be that kind of good honest engagement with each other. At the end of the day, the local authority would decide in the first instance if a planning application was made to it what could be built and where but we would not waste taxpayers’ money building on a flood-plain.
John Brady (Wicklow, Sinn Fein)
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I have a final question on social housing delivery. Some 7,653 properties had been identified for social housing. Mr. McDonagh has been questioned about that given only 2,512 of the units offered were accepted by the local authorities. He was not able to give the detail. Six local authorities were mentioned as not having taken any. Can he give us a breakdown by county of where those units ended up? I do not expect him to list them all off here.
Mr. Brendan McDonagh:
Mr. McCarthy has pointed out the ones that took 0%. I can see where they are – Mayo, Tipperary, Roscommon and Longford. Obviously, if the local authority did not decide to take them up, the developer would have sold them in the market. In some instances, the debtors did not want to sell them and they rented them out. If they had an ability to refinance themselves out of NAMA, they would have kept those assets. I would not know whatever they did with them afterwards.
John Brady (Wicklow, Sinn Fein)
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I do not know the criteria used by NAMA to identify this housing and what it deemed to be suitable.
Mr. Brendan McDonagh:
I will explain what we did. The Housing Agency was charged to be the intermediary between NAMA and the local authorities. A very good, senior guy in the Housing Agency came into NAMA and sat in NAMA in our premises for six to nine months. We said it was an open book - to look at what is there. These are all the units available in each county. We gave him the list and he went back and liaised with his colleagues in the Housing Agency and the local authorities and was able to say what was in Kerry, Cork, Galway or whatever was the case. He talked to local authorities in the various locations and they came back to us and said, “We don’t want those ones in this town”. For argument's sake, in Kerry, where I am from originally, we might have had units in Tralee and Dingle. The local authority might have come back and said it was interested in the ones in Dingle, did not want the ones in Tralee but was looking for ones in Killarney. We might not have had any units in Killarney so there was nothing we could do about that. That was the iterative process that went on. It was not as if we were saying, “Here are 200 units in Kerry”. We actually gave them specific addresses with, say, 12 houses in a certain location and ten apartments in another. Local authorities knew exactly what they were, the type of properties they were and the condition they were in. The commitment we made was that if they wanted them and if they did not want to buy them – and of course a lot of local authorities did not have money during the crisis - we said we would buy them and rent them to the local authorities after full remediation.
John Brady (Wicklow, Sinn Fein)
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I was on the local authority in Wicklow at a time a number of properties were offered to the local authority. There is an attempt to portray the local authorities as putting up their hands and saying-----
John Brady (Wicklow, Sinn Fein)
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I am saying that is the impression that is being given. I know some of the properties offered to Wicklow County Council in my hometown of Bray where there was a massive housing crisis when these were offered, and there still is. Any local authority would take the hand off you if they thought they were getting suitable housing. With some of the properties being offered in Bray, we have to ask who came up with the proposal to offer them to the local authority in the first instance. That is all I will say on that. I cannot answer for the local authorities but from Wicklow County Council’s perspective in that case, what was being offered in Bray was not fit for purpose.
Mr. Brendan McDonagh:
I respect that. We made everything we had available and they could decide whether they were suitable. I fully accept that some of them might not have been suitable but if they were not suitable, they were not suitable.
As I said, the local authorities have their own reasons. They have to deal with the issues on the ground.
John Brady (Wicklow, Sinn Fein)
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That concludes our engagement, Mr. McDonagh will be glad to hear. It is probably his last engagement before an Oireachtas committees I thank him for attending. I wish him all the best in whatever endeavour he ends up doing. I also thank Mr. Carville from the Department of Finance and the C and AG for their attendance once again.
Is it agreed that the clerk to the committee will seek any follow-up information and carry out any agreed actions arising from the meeting? Agreed.
The committee will next meet on Thursday, 9 July 2026, with RTÉ, along with representatives from the Department of Culture, Communications and Sport.