Michael Healy-Rae (Kerry South, Independent)
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Question 77: To ask the Minister for Finance his views on a matter (details supplied) regarding nationalised banks; and if he will make a statement on the matter. [10467/12]

Michael Noonan (Limerick City, Fine Gael)
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The Government is acutely aware of the increasing financial stress that some households are facing arising from difficulty in meeting their mortgage commitments. The Government, therefore, has established a Steering Group to oversee and drive the implementation of the recommendations contained in the report of the Inter-Departmental Working Group on Mortgage Arrears across Government. The Inter-Departmental Group concluded that those people who can meet their mortgage obligations should do so but that appropriate measures need to be developed to assist those mortgage holders who are experiencing real difficulty in meeting their repayments. Significant progress has already been achieved in implementing the Group's recommendations. For example, the Minister for Justice, Equality and Defence has published a draft Personal Insolvency Bill to provide a framework for the resolution of unsustainable personal debt, including mortgage debt, in a non judicial framework. In addition, the Central Bank, as regulator, has required all mortgage lenders to develop strategies and implementation plans to deal with their individual mortgage arrears situations. The Central Bank is currently reviewing these strategies and examining the plans of lenders to offer appropriate longer term solutions, such as those recommended in the Inter-Departmental Mortgage Arrears Working Group report and other options that banks may develop themselves, for their customers who may have unsustainable mortgages. The Central Bank will continue to engage with lenders on the further development and implementation of these plans.

However, the banks in Ireland, including those in which the State has a significant shareholding, are independent commercial entities and decisions on the handling of their mortgages and other loans, including distressed loans, are, in the first instance, a matter for the Boards and management of individual institutions in the exercise of their commercial and fiduciary responsibilities. However, to the extent that borrowers and lenders are not in a position to reach individual agreements on stressed or unsustainable debt situations, the personal insolvency reforms outlined above will now provide an effective statutory framework for the consideration and resolution of such matters in a manner that will take account of all relevant factors and the legitimate interests of both the borrower and lenders. Of course, to the extent that losses are incurred arising from the provision for or write down of impaired loans, this will deplete the capital base of banks, including the extensive capital provided by the taxpayer to the covered banks, so there is also a requirement to prudently manage that capital and avoid inappropriate write off of loans in the overall interest of the taxpayer.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Question 78: To ask the Minister for Finance if he is satisfied that the value of the land assets taken from financial institutions by the National Assets Management Agency is at least equal to the price paid by NAMA for these assets. [10500/12]

Michael Noonan (Limerick City, Fine Gael)
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I am informed by NAMA that full due diligence and final loan valuations have been completed on the first five tranches of loans to be transferred (with nominal loan balances of €59 billion) and that the due diligence and valuation process is close to completion on the residual tranches. On the first five tranches, NAMA paid consideration of €26.363 billion for loans that are secured by property and other collateral which had a current market value of €26.653 billion using the November 2009 valuation methodology that underpins the value of all assets transferred to NAMA. Information on the final consideration paid for all tranches and on the current market value of associated collateral is expected to be available at the end of the first quarter of 2012.

Since November 2009, property prices have fallen. For 2010, NAMA recorded an impairment provision of €1,485 million against its loans and receivables portfolio. I am informed by NAMA that due to the decline in property values during 2011, it also will have to make an impairment provision for 2011. The size of that impairment provision is not yet calculated as it is a complex exercise which is carried out under International Financial Reporting Rules (IFRS).