19. Loans and Receivables
| Group | Note | 2014 €’000 |
2013 €’000 |
|---|---|---|---|
| Loans and receivables carrying value before impairment | 16,880,809 | 35,438,959 | |
| Less: provision for impairment charges on loans and receivables | 12 | (3,520,775) | (4,125,260) |
| Total loans and receivables | 13,360,034 | 31,313,699 |
The above table reflects the carrying value of the loans acquired from the Participating Institutions, taking into account the amount the Group acquired the loans for, which was at a discount to the contractual amounts owed under the loan agreements, and loan movements since acquisition, less any additional impairment deemed to have occurred subsequent to acquisition.
The following table summarises the movement in loans and receivables for the reporting period.
Reconciliation of movement in loans and receivables| Group | Note | 2014 €’000 |
2013 €’000 |
|---|---|---|---|
| Loans acquired – opening balance | |||
| – NAMA | 23,723,370 | 26,039,684 | |
| – NARL | 19.1 | 11,715,589 | - |
| 35,438,959 | 26,039,684 | ||
| New loans issued / acquired | |||
| – NAMA | 19.2 | 246,601 | 19,424 |
| – NARL | 19.1 | - | 12,928,345 |
| Receipts from and payments to borrowers | |||
| Non-disposal income | 19.3 | (808,756) | (792,230) |
| Proceeds from the sale of collateral as security against loans and receivables and other loan repayments | 19.4 | (4,221,417) | (3,146,290) |
| Proceeds from the sale of loans | 19.5 | (3,419,959) | (293,695) |
| Funds advanced to borrowers | 644,950 | 664,952 | |
| Funds in the course of collection | 19.6 | 19,827 | (51,377) |
| Deferred consideration on sale of loans | - | (10,986) | |
| Principal and interest payments on the NARL loan facility deed | 19.1 | (11,715,589) | (1,212,756) |
| Costs recoverable from borrowers | 19.7 | 24,386 | 18,465 |
| Total receipts from and payments to borrowers | (19,476,558) | (4,823,917) | |
Other loan movements |
|||
| Loan interest income earned - NAMA | 5 | 844,984 | 1,058,032 |
| Movement in overdraft accounts | 17, 19.8 | (10,019) | (11,282) |
| Loss on disposal of loans | 9 | (278,377) | (29,386) |
| Surplus income | 9 | 572,517 | 530,838 |
| Foreign exchange gain/(loss) on loans and receivables | 11 | 288,967 | (193,043) |
| Impairment crystallised from disposals | 9, 12, 19.9 | (610,069) | (52,507) |
| Impairment crystallised from debt restructures | 12, 19.10 | (131,787) | - |
| Other | (4,409) | (27,229) | |
| Total other loan movements | 671,807 | 1,275,423 | |
| Total loan movements | (18,804,751) | (3,548,494) | |
Loans and receivables pre impairment |
|||
| Loans and receivables - NAMA | 16,880,809 | 23,723,370 | |
| Loan facility deed - NARL | 19.1 | - | 11,715,589 |
| Total loans and receivables pre impairment | 16,880,809 | 35,438,959 | |
| Impairment of loans and receivables | 12 | (3,520,775) | (4,125,260) |
| Net loans and receivables after impairment | 13,360,034 | 31,313,699 |
Pre-impairment loan movements occurring in the year are €18.8bn (2013: €3.5bn), which includes the repayment of the loan facility deed by joint Special Liquidators of €11.7bn (2013: €1.2bn), and €7.6bn (2013: €3.5bn) of cash receipts from debtors, generated from the sale of loans and properties and non-disposal income of €0.8bn (2013: €0.79bn).
Pre-impairment loan movements occurring in the year are €18.8bn (2013: €3.5bn), which includes the repayment of the loan facility deed by joint Special Liquidators of €11.7bn (2013: €1.2bn), and €7.6bn (2013: €3.5bn) of cash receipts from debtors, generated from the sale of loans and properties and non-disposal income of €0.8bn (2013: €0.79bn).
Funds advanced to debtors for working and development capital was €0.6bn (2013: €0.7bn). Loan interest income of €0.8bn (2013: €1.1bn) was earned in the year. Further information on certain loan movements are provided below.
19.1 Loan facility deed - NARL
With the establishment of NARL (in Voluntary Liquidation) in 2013, NAMA acquired a loan facility deed and floating charge over certain IBRC assets which were used as collateral by IBRC as part of its funding arrangements with the Central Bank of Ireland. In 2014, NARL (in Voluntary Liquidation) received €11.7bn (2013: €1.4bn) of principal and interest repayments from the joint Special Liquidators of the loan facility deed. The loan was fully repaid on 21 October 2014.
19.2 New loans issued / acquired - NAMA
New loans issued / acquired – NAMA – includes loans of €234m acquired from two financial institutions in relation to an existing NAMA debtor connection. The acquisition of the additional loans provides NAMA with control over the associated debts of the secured asset.
19.3 Non-disposal income
Non-disposal income receipts in 2014 were €0.8bn (2013: €0.8bn). This amount comprises primarily rental income received during the year.
19.4 Proceeds from the sale of collateral as security against loans and receivables and other loan repayments
Proceeds from the sale of collateral as security against loans and receivables of €4.2bn (2013: €3.2bn) represents any receipts relating to the disposal of assets or as a reduction in the debt held by NAMA.
19.5 Proceeds from the sale of loans
Proceeds from the sale of loans of €3.4bn (2013: €0.3bn) represents any receipts relating to the disposal of loans and receivables by the Group.
19.6 Funds in the course of collection
Funds in the course of collection comprise transactions which clear bank accounts after the reporting date but which relate to transactions occurring within the reporting period.
19.7 Costs recoverable from borrowers
Costs recoverable from Borrowers are costs incurred by NAMA which are recoverable from the debtor and added to the carrying value of loans and receivables.
19.8 Overdraft accounts
Participating Institutions continue to fund debtor overdraft accounts and collect cash repayments on these accounts on NAMA’s behalf. During the year, the net amount due to NAMA in respect of unsettled overdrafts increased by €10m (2013: €11m). The movement is recognised as a decrease in loans and receivables.
19.9 Impairment crystallised from disposals
Impairment is crystallised on the sale of loans and assets when an existing impairment provision had previously been recognised.
19.10 Impairment crystallised from debt restructures
Impairment crystallisations from debt restructures occur when, on the agreement of a debt restructure, impairment previously recognised on the loans affected are crystallised. The majority of the impairment crystallised from debt restructure relates to the court-approved restructure of a NAMA debtor.