NAMA team still haven’t seen €77bn loan files
By Mary Regan Political Reporter
THURSDAY, OCTOBER 15, 2009
THE Government has still not seen the records or books of up to €77 billion worth of development loans that it will soon take over from the country’s banks.
Just weeks before the National Assets Management Agency (NAMA) is passed into law, the Department of Finance has admitted that its plans are based on "aggregate data which has been provided by the institutions".
The department has not been able to "verify the integrity of the data" because "the NAMA team has not had direct access to individual transaction records and loan files".
The statement was made in the draft NAMA Business Plan published last night, which said that €15bn of loans taken over by the state will not be paid back by property developers.
The document said at least 20% of the loan sums owed to NAMA will default.
"Of the €77bn nominal value of loans acquired, €62bn will be repaid by borrowers and loan defaults or debt restructuring will occur on €15bn," it stated, adding these were "conservative and prudent assumptions".
Finance Minister Brian Lenihan told the Dáil the figures in the report "are liable to be adjusted further as the detailed analysis and due diligence is carried out".
The plan projected that by the time the NAMA plan is completed by 2020 and loans with interest are repaid, it will have made a profit of €4.8bn.
However, Fine Gael’s finance spokesman Richard Bruton said "the tooth fairy, the Easter Bunny and the Loch Ness Monster are all more credible propositions" than the figures that have been given in the business plan.
He said: "There is no analysis and no depth of information on how the rather extraordinary assumptions were arrived at."
The NAMA Bill last night survived its first vote in the Dáil.
The bill was approved by 77 to 73 on a second stage vote.
The business plan is expected to be passed into law by early November and the top 10 to 15 loans – which are worth a total of €16bn – will be transferred by the end of the year.
This means that "Christmas will come early for the top developers and bankers", according to Labour’s finance spokes-woman Joan Burton.
But Mr Lenihan said: "NAMA is not designed to be and will not be permitted to operate in practice as a bail-out mechanism for developers who have operated irresponsibly".
The Government hopes to have dealt with the top 32 loans – worth €24bn – by January, and the top 100 – worth €38bn – by February.
This story appeared in the printed version of the Irish Examiner Thursday, October 15, 2009
Okay boys and girls, lets put this in perspective. I want to buy a horse from a traveller at a fair. Instead of going to said fair and having a look at the horse I decide to give the traveller a ring on the phone. What's the horse like I ask, "Ah, sure she's great boss, worth a grand at least". "Okay, I reply, I'll give you 1,200 for the horse as I'm sure in the long term I'll get a great return out of her, heck I may even run her at the grand national if she's as good as you say"
Can anyone see the problem with this scenario. The government has priced the loan books of the banks and made on offer AND THEY DIDN"T EVEN AUDIT THE FECKING FILES, not even audit them but they still haven't even looked at them. What in the name of good god is going on. We are about to saddle our children with debt they cannot even fathom. We are about to pilfer their communion money, smash open their piggy banks and hand it in ernest to the bankers who drove this property bubble into the skies and then into the gound. The opposition only got their hands on this info last night in the Dail and are demanding rightly an unbiased audit of the loan books. Will it happen- God knows, but if it doesn't you may find that we are crystalising a level of debt that has no hope of return. And what are we getting for this investment? A stern warning from Brian Lenihan that the banks have a national duty to get the money rolling out to small businesses again but no concessions, no guarantees and no incentives. Why would they bother. Heck the banks can shut up shop and demand blood samples for a loan from now on if they want.
I am beyond shocked. I am beyond angry. They is no word in the English language that encapsulates the level of stupidity this government is showing. The closest analogy I can draw is a drunk wandering into a casino and betting his everything he owns or will ever own on the roulette wheel on zero and hoping blindly and frantically that the ball will somehow magically land there.
Ask the bookies for odds on that one.
