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Committee of Inquiry into the Banking Crisis: Nexus Phase (22 Apr 2015)

Pearse Doherty: Okay. In relation to the security that underpinned some of these loans, and you mentioned in Vol. 2, page 5, table 3 and again Vol. 1, page 4, table 2, where NAMA wrote down €477 million as a result of not being able to ... inadequate security, and then claimed back €334 million from the banks for the same purposes, which totals €811 million of unenforceable securities....

Committee of Inquiry into the Banking Crisis: Nexus Phase (22 Apr 2015)

Pearse Doherty: Okay. So in relation to the unenforceable security of loans, what was the par value of unenforceable security?

Committee of Inquiry into the Banking Crisis: Nexus Phase (22 Apr 2015)

Pearse Doherty: So we are talking about somewhere in the region of €1.7 billion-----

Committee of Inquiry into the Banking Crisis: Nexus Phase (22 Apr 2015)

Pearse Doherty: About €2 billion of loans that the institutions had that .... the money could not be collected or the assets could not be sold because the security-----

Committee of Inquiry into the Banking Crisis: Nexus Phase (22 Apr 2015)

Pearse Doherty: So did those people who took out the money just walk away because the security is not there? Is that what happens in a case like this?

Committee of Inquiry into the Banking Crisis: Nexus Phase (22 Apr 2015)

Pearse Doherty: Okay. Mr. Daly, you mentioned commercial property was basically NAMA is commercial property, the €74 billion, the majority of this is commercial property and you give a good breakdown in relation to where the institutions and the type of property that were held in Vol. 2, page 7. We have the consideration amount, the €32.4 billion that was paid and we can see very clearly...

Committee of Inquiry into the Banking Crisis: Nexus Phase (22 Apr 2015)

Pearse Doherty: You can give an estimation for land but in terms of ... are there no kind of guidelines in terms of hotels, investment property-----

Committee of Inquiry into the Banking Crisis: Nexus Phase (22 Apr 2015)

Pearse Doherty: Thank you.

Committee of Inquiry into the Banking Crisis: Nexus Phase (22 Apr 2015)

Pearse Doherty: Agreed, yes.

Committee of Inquiry into the Banking Crisis: Nexus Phase (22 Apr 2015)

Pearse Doherty: It's the water meters, Joe.

Committee of Inquiry into the Banking Crisis: Nexus Phase (22 Apr 2015)

Pearse Doherty: Go raibh maith agat, a Chathaoirligh. Mr. McDonagh, just, when we came back from the previous break you just clarified a response that you gave to myself and the question I was asking you earlier on was of the €811 million that was clawed back, or wasn't paid by NAMA, as a result of security issues, you mentioned that the loan book value of that was actually €3.5 billion, is...

Committee of Inquiry into the Banking Crisis: Nexus Phase (22 Apr 2015)

Pearse Doherty: But these banks which have transferred their loans to NAMA had issued loans of the value of €3.5 billion that cannot be called on because of securities, that can't be-----

Committee of Inquiry into the Banking Crisis: Nexus Phase (22 Apr 2015)

Pearse Doherty: No I understand you paid nothing to the banks but the Irish taxpayer paid for the banks, paid for-----

Committee of Inquiry into the Banking Crisis: Nexus Phase (22 Apr 2015)

Pearse Doherty: And is there any recourse in a situation like that there, where, because of documentation, you've outlined some of the issues that would arise in these circumstances, is there any recourse in relation to this €3.5 billion?

Committee of Inquiry into the Banking Crisis: Nexus Phase (22 Apr 2015)

Pearse Doherty: It's gone.

Committee of Inquiry into the Banking Crisis: Nexus Phase (22 Apr 2015)

Pearse Doherty: It's gone. Right. In relation ... it's absolutely staggering, the figure of €3.5 billion, for, I'm sure, for the general public there. In relation to the Vol. 1, page 35 figure, €2.5 billion ... we look at the property valuation process that NAMA used, and particularly the property uplift adjustments - this is the long-term economic value - that NAMA used and approved by the...

Committee of Inquiry into the Banking Crisis: Nexus Phase (22 Apr 2015)

Pearse Doherty: I understand. Across the board,-----

Committee of Inquiry into the Banking Crisis: Nexus Phase (22 Apr 2015)

Pearse Doherty: -----the average uplift, which was 8.8%, will have materialised, and maybe not, because there's a rental issue, as you have mentioned, income as well that has been generated.

Committee of Inquiry into the Banking Crisis: Nexus Phase (22 Apr 2015)

Pearse Doherty: But the question I have specifically is, for example, the 9.5% uplift in NAMA's properties that were secured in the loans ... do we know if that was achieved? Do we know if it was exceeded?

Committee of Inquiry into the Banking Crisis: Nexus Phase (22 Apr 2015)

Pearse Doherty: Yeah.

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