Pearse Doherty (Donegal, Sinn Fein)
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151. To ask the Minister for Finance the estimated surplus from National Asset Management Agency, NAMA; when the surplus will accrue to the State; his plans for the surplus; and if he will make a statement on the matter. [26494/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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I wish to advise the Deputy that, as outlined in its recent 2017 Annual Report, NAMA expects to return a surplus to the State in the region of €3.5bn, subject to prevailing market conditions, when it completes its work. This is an increase of €500m from the previous estimate in its 2016 Annual Report, and a testament to the progress that NAMA has made in achieving its primary objective of enhancing the value of its assets in the interest of the State.

It is important to recognise that this is a projected surplus - it will only materialise after NAMA’s debt is fully repaid and NAMA’s ongoing work is completed. It is expected that NAMA will substantially complete its work by 2020. The Agency announced in October 2017 that it had redeemed all of its €30.2bn in Senior Debt which was guaranteed by the State and in April 2018 it redeemed €243m of its subordinated debt. However, notwithstanding the successful achievement of repaying the State’s contingent liability, three years ahead of schedule, there is still a significant body of work yet to be completed by NAMA.

This work includes completion of NAMA’s residential and Docklands SDZ funding programmes, the repayment of its outstanding subordinated debt of €1.4bn, and deleveraging of the remainder of its loan portfolio. The carrying value of the portfolio as year-end 2017, net of cumulative impairment, was €3.2 billion. I am advised that this residual loan portfolio will require intensive case management and asset management if the projected terminal surplus is to be realised. As such, the projected surplus will not accrue to the State before 2020.

Any NAMA surplus paid, while Exchequer positive, will not impact the general government balance, in line with Eurostat rules. It will be a decision for the Government as to how any surplus returned by NAMA will be utilised within the framework of the fiscal rules. However, the intention has always been to use such receipts from the resolution of the financial sector crisis to pay down our national debt and reduce our debt servicing costs.