Written answers

Tuesday, 15 January 2019

Photo of Fiona O'LoughlinFiona O'Loughlin (Kildare South, Fianna Fail)
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219. To ask the Minister for Finance the status of the work of NAMA; the expected surplus to be returned to the State; the way in which the surplus to date will be used; the date the agency will be wound up; and if he will make a statement on the matter. [1254/19]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I wish to advise the Deputy that it is expected that NAMA will substantially complete its work by 2020/2021 and that, over those two years, the Agency expects that a surplus, currently projected to be €3.5bn, will be available for return to the State.

NAMA announced in October 2017 that it had redeemed all of its €30.2bn in Senior Debt which was guaranteed by the State and since April 2018 it has commenced the redemption of its €1.6bn in 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.

While it is currently estimated that NAMA will return a surplus in the region of €3.5bn to the Exchequer, this surplus has yet to fully crystallise. It is important to note that realisation of this surplus depends on the success of NAMA's ongoing deleveraging, its Dublin Docklands SDZ programme and residential funding programme. These activities must be completed for the expected surplus to be earned.

NAMA was mandated in late 2009 to deal expeditiously with its acquired loan portfolio and to extract best value from that portfolio. NAMA has been extremely successful in achieving this mandate and has now entered into the final phase of this work. NAMA continues to de-risk its positions so that by 2020, the real estate and financial assets supported by NAMA funding will comprise a relatively small portfolio of liquid commercial and residential exposures. Active consideration is underway regarding NAMA’s end of life strategy and the maximisation of the return of any surplus to the State in respect of these remaining assets.

As the Deputy will be aware, NAMA was established with a very specific legal mandate, which was approved by the European Commission in 2010. It is important that NAMA’s role is preserved and that it completes its work in line with its original mandate.

As per section 60(2) of the NAMA Act 2009, NAMA may use surplus funds to redeem and cancel its senior and subordinated debt. Surplus funds may only be returned to the Central Fund once NAMA's debt has been redeemed in full in 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.

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