Does NAMA still believe the banks? – Noonan

first_imgNewsLocal NewsDoes NAMA still believe the banks? – NoonanBy admin – July 20, 2010 573 Email Previous article56% drop in Shannon aircraft traffic in JuneNext articleMunster to open Heineken Cup campaign away to Irish admin WhatsApp Print WARNING that it is virtually impossible for NAMA to be profitable, the FG Finance Spokesman, Michael Noonan, says that just one quarter of property-backed loans over €5million in NAMA institutions are performing.Pointing out that rather than, as stated in its original business plan, 40% of loans were estimated to perform, Mr Noonan says that, in fact, just 25% of loans transferred to it are performing.Sign up for the weekly Limerick Post newsletter Sign Up “This means that only one quarter of all property-backed loans in the NAMA-covered institutions, in excess of €5 million, are performing, and when seen in this way, the task of NAMA is truly enormous and it is virtually impossible for it to be profitable”.Deputy Noonan contends that the economic valuation of the transferred loans was significantly too high and that as there is no longer 40% liquidity in NAMA’S portfolio, it has taken a huge hit.“This raises serious questions for NAMA – will it now have sufficient cash flow to cover its running costs, and what now is its planned timing to release assets on to the market?”With NAMA’S bad assets now amounting to 75% of the total portfolio, rather than the 60% estimated, the Limerick East Deputy queries if NAMA still believes the information flow from the banks?He says that NAMA was presented to the Irish taxpayer as a good deal, which over time would realise a profit of €4.6billion.“It is now clear that it has paid too much for the portfolio and that losses are inevitable. Its business plan provides further evidence that the government’s banking policy is a disaster.“NAMA won’t wash its face, Anglo Irish Bank is swallowing taxpayers’ money like some prehistoric monster, and AIB and Bank of Ireland are still not providing the credit lines needed by businesses and householders”.Emphasising the need for assurances from Minister Lenihan that the next tranche of loans to be transferred will not underperform to a greater degree than the first tranche, Mr Noonan says it is reasonable to assume that the better performing loans have already been transferred.“The minister must also insist that NAMA values any future assets in accordance with the information now available in the business plan and he must insist that the valuation of non-performing loans is further cut to take the latest information into account”.center_img Linkedin Facebook Twitter Advertisementlast_img

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