The majority of debtors are co-operating and will work with the National Asset Management Agency (NAMA) to achieve the best result possible for the taxpayer, NAMA Chairman Frank Daly said today.
Speaking to the Oireachtas Joint Committee on the Implementation of the Good Friday Agreement, Mr Daly said enforcement proceedings were taken as a last resort and only in cases where other approaches were not capable of delivering the best result for the taxpayer.
“NAMA is not a debt collection agency but let’s not be naive enough to think that we don’t have debts to collect on behalf of our people,” said Mr Daly. “But we are working constructively with debtors in every case that we can because that is the only way to deliver a successful outcome.”
Mr Daly said NAMA debtors fall into three categories:
- Those who want to co-operate and have something to contribute to working out their loans; this category accounts for the majority of debtors
- Those who want to co-operate but, despite this, are incapable of contributing meaningfully to the workout of their loans
- Those who claim to be willing to co-operate but whose actions do not reflect this (through refusals to reduce overheads, mandate rental income streams to NAMA, reverse asset transfers or provide charges over unencumbered assets)
“In the majority of cases we are working with debtors to maximise the value that can be realised from their loans and associated assets; so they see the path ahead – however difficult that may be,” he said.
Mr Daly commented that the Agency was conscious of Ireland’s need to create and protect jobs and that it engaged actively with the Government, local authorities and agencies such as the IDA to facilitate job creation wherever possible.
But he noted that some businesses, particularly those with liabilities that have extended for many years beyond the Agency to other creditors, were not sustainable in the long term and that the Agency could not support such businesses if the taxpayer would suffer as a result.
Mr Daly told the Committee that NAMA had:
- Assessed business plans of 700 debtors, covering 97% of its loans
- Made 6,000 individual credit decisions since March 2010
- Approved close to €1 billion in advances of working and development capital
- Approved asset sales of more than €7 billion
Mr Daly said the Agency had a robust but efficient credit approval process that decides on individual credit applications with an average turnaround time of six days.
“One of the regular unfounded criticisms thrown at NAMA is that we are slow in making decisions on credit applications and offers to purchase assets,” he said.
“This process is not slow but what some people have difficulty with is the fact that NAMA is applying good practice – rigorous examination of credit proposals and realistic assessment of purchase offers – in dealing with applications for credit and offers to purchase”.
“This, quite frankly, is not what many were used to in the banking and property development practices that got us where we are today and led to the establishment of NAMA. We are, of necessity, rigorous in our dealings with all parties. We are not, as these figures illustrate, either slow or lumbering.”
Mr Daly also said the Agency was awaiting final approval from the European Commission for its proposed initiative aimed at the residential mortgage market and that this approval was expected imminently.
He said the proposal was a further example of innovation within the Agency, as part of a suite of such initiatives, to help restore stability to the property market and support Government policy on employment and economic recovery.