Further to the laying of the NAMA 30 June 2010 Accounts and its Annual Statement 2011 by the Minister for Finance before each House of the Oireachtas, the National Asset Management Agency (NAMA) has today published its 30 June 2010 Quarterly Report and Accounts. The Agency has also published its Annual Statement setting out its priorities for 2011.

Some of the key points from the Quarterly Report are set out below

• NAMA recorded a profit of €6 million for the second quarter to the 30 of June 2010. In the half year to 30 June NAMA shows an accumulated loss of €1 million due to the €7 million loss incurred in the first quarter of 2010 which included significant setup costs in advance of the first loans being acquired on 30 March.
• The proportion of the acquired loan portfolio that was performing at 30 June 2010 was 29%.
• Income of €94 million was earned for the second quarter ended 30 June on a loan portfolio that increased to €16.4 billion. The significant items that reduce total operating income are interest due on NAMA securities of €14 million, expenses of €9.6million and the mark-to-market negative movement on hedging derivatives and foreign exchange movements of €64 million. It is important to note that this is a mark-to-market movement on the derivative valuations in accordance with international accounting standards and of course these figures will, over time, increase and decrease in line with market movement in interest rates. As such it is not a permanent or indeed a cash loss for the period.
• In terms of cash performance, NAMA generated €130 million net positive cashflow from operating activities in the second quarter. Cash was primarily generated from receipts from borrowers (interest paid on loans) of €117 million and NAMA derivative net cash inflows of €73 million. The significant cash outflow for the second quarter period was €47 million advanced to borrowers to complete projects and fund working capital.
• By the 30^th of June, NAMA had issued €8.1 billion in NAMA Government Guaranteed Floating Rate Notes and €425 million in NAMA Callable Perpetual Subordinated Bonds as consideration for eligible assets acquired from the five participating institutions. This represents an injection of €8.5 billion of liquidity into the Irish banking system.

The Annual Statement identifies the following key priorities for 2011

• Completion of the review of due diligence and the assignation of final valuations to eligible assets before February 2011
• NAMA will likely extend its direct engagement with major debtors to the largest borrowers with exposures of €50 million or more. Comprehensive arrangements will be put in place for the Participating Institutions to manage (under close monitoring and control by NAMA) the debtors with exposures below this threshold.
• The determination of strategies for the management of viable debtors and the initiation of enforcement proceedings against debtors deemed not to be viable
• The Board of NAMA has set a target of 25% of repayment of Borrower debt by end 2013. NAMA expects significant progress to be achieved in 2011 after the major borrowers’ business plans have been approved.

Comments by Chairman Frank Daly and Chief Executive Brendan McDonagh

NAMA Chairman Frank Daly said: "NAMA made strong progress during the second quarter as it completed the acquisition of the first tranche of loans from the largest developers and began directly managing those loans for the first time. The impact has been very positive as we ensured that borrowers prioritised debt servicing by introducing diversion of rental income to NAMA charged rent accounts."

NAMA Chief Executive Officer Brendan McDonagh said: "We are now setting out detailed objectives for debtors post the business plan reviews which will have to be followed by those borrowers who account for the largest loans. Based on our experience of engagement with borrowers to date we expect that the majority of borrowers will see the benefit of co-operating fully with us to achieve the best commercial outcome but where they don’t or won't, NAMA will have no option but to start enforcement proceedings against them." 

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