Irish Nationwide accounts for virtually all of the €1bn in loans that were declared worthless by Nama last week because they lacked sufficient security.

The building society regularly used personal guarantees when lending money, and Nama has taken the view that these do not count as ­security.

It has also told financial institutions that equity from developments that was used to fund other developments is also worthless.

A spokesman for Irish Nationwide had not returned a call seeking comment at the time of writing.

Meanwhile, AIB could be facing a 100% haircut on more than €550m of loans given to developer Liam Carroll because of inadequate security.

Mr Justice Peter Kelly has said that he found it "astonishing" that the bank ad­vanced the loans on the undertaking from solicitors for Carroll's Zoe companies to hold on trust for AIB the title deeds, which was a "far cry from a legal mortgage".

A spokesman for Nama confirmed that it would pay as little as 0% of the value of loans to properties without the correct security in place.

The final haircut on Nama loans is expected to be between 47% and 50%, des­pite the fact that a large number of more valuable investment property loans were included in the first tranche. Security and title issues affected the haircuts in the first tranche however, whereas values will be the issue moving forward with some development land attracting haircuts of more than 90%.