Chairman Frank Daly: last large loans

NAMA is expected to draw up another revised business plan next year after the decision to shift all property loans below €20m to the agency.

Under the terms of the government's four-year economic recovery plan, Nama will take on all remaining development loans from the banks. The loans under €20m had been excluded so that Nama could focus on managing the assets of the country's biggest property developers.

However, by taking on the smaller exposures Nama could be open to the worst-quality loans and the banks face serious losses on them given the severe discounts being imposed by the agency so far. Nama, which is chaired by Frank Daly, is currently taking possession of the last large development loans from the banks, which will see a total of €73bn on the agency's books by early next year. The discount on these loans is forecast by Nama at about 58%.

It is expected that once all due diligence and scrutiny on the loans is completed the agency will submit a new business plan – the third in its short life. In June, Nama published a revised plan, lowering its forecast of how much profit it expected to make over its lifetime from nearly €5bn to about €1bn. However, in a worst-case scenario it warned it could make a loss of €800m.