Categories Uncategorized NAMA 2013 End-of-Year Review Post author By Seamus Coffey Post date January 3, 2014 10 Comments on NAMA 2013 End-of-Year Review Available here. Related ← A lovely graph → Full-Year Exchequer Statement 10 replies on “NAMA 2013 End-of-Year Review” fyi Nama generates €16.5bn in cash Agency to invest additional €1.5bn in construction of 4,500 new homes http://www.irishtimes.com/business/economy/nama-generates-16-5bn-in-cash-1.1643498 Such ‘generation’ is, of course, both a 70 Billion illusion and a 70 Billion millstone from a citizen_serf perspective. Seamus Progress if sorts….much of it non-Ireland low lying fruit. The issue has always been how much if the euro 22bn will be recovered….ie how much contingent liability is in there, on top of the other Irish contingent liabilities re banks, pensions, etc……. Critical couple of years ahead…..either pull up, or go further into the black hole. Will the govt need to revise projections again at end 2014, negatively? If they get a volatile international economic environment, it will be very difficuly not to slip further down the slippery slope….risks are firmly to the downside, despite the occasional “green shoot”. For me, the best indication of further real deterioration will be signaled by further raiding on private pension funds and deposits (directly, via savings’ taxes, etc). @David Most of that of course is non-recurrent cash. It’s not recurrent “cash flow” /turnover, it’s principal /capital in nature for the most part. With the low lying fruit gone, there is significant chance that there will ultimately be a sizable hole left…….but we have so little info of course. Also worth looking at CB’s banking statistics for November. Not easy to see any corner-turning either on the asset or liability side. http://www.centralbank.ie/press-area/press-releases/Pages/MoneyandBankingStatisticsNovember2013.aspx just get NAMAwinelake information..much better @DJ if anything the new format allows more deeper analysis,but a tad wonky for on here.Quite an avid reader and fan myself. The above numbers are total bol**ock,what property or asset management company includes “profit” from one off non recurring income producing assets,with recurring net rental income.It renders tracking and comping redundant,I lost the will to read it after that. @Paul W / John Gallagher Whatever about the confused presentation, NAMA is in reality doing very well. It appears, from the release, to have generated about 2 billion ‘non-disposal income’ . This is an excellent continuing income stream, funded by very low cost bonds. NAMA itself appears confused by its own direction ( or directive to it) in thinking of itself as primarily an asset disposal company. Both its role and focus should have changed, and in some ways it is moving towards this. It should concentrate on its strengths. Clearly those strenghts are its ability to generate income from its assets and its potential to me a major investor in badly needed housing and commercial infrastructure. Regrettably, NAMA is hemmed in the Troika insistence that bonds be paid back quickly. This clause was not in the original Troika agreement, but was subsequently inserted and the government as usual caved in. The Troika view of course, is that while losses may be socialised and added to national debt ad infinitum, profits or potential profits or attractive income streams, must immediately be returned to the private sector. Its so much better, you see! The Irish government need to make the case, and insist on it, that NAMA long term profits remain within the State, until the full book value of the loans transferred from the banks are paid back. Some people still concern themselves about whether NAMA can ‘make a profit though full disposal’ by 2020. It is a baloney objective and a baloney strategy. NAMA needs to make and assert its case that its role is to provide best value to the State, by whatever means possible, and not allow itself to be or to become another time bound ideological instrument in the Troika toolkit. @Joseph Ryan,happy new year Joseph,the numbers are nonsense who gives a s**t about “45”,what entity reports on a 45 month basis it’s an embarrassment total absolute gargbage.Yeah it’s of some interest to historians perhaps maybe as a footnote but to report like that please. Why won’t they disclose the cash that was/is generated then lost by the assets sold? “NAMA continues to generate significant cash through disposal activity and non-disposal income. Some €5.8 billion in cash was generated in 2013, including €3.8 billion from the proceeds of asset disposals. Total cash generated in the period of 45 months since inception has reached €16.5 billion (the first loan transfers took place in March 2010). Of the €16.5 billion, €10.6 billion relates to asset disposals and €4.5 billion to other income, mainly rental receipts from properties controlled by debtors and receivers. The residual €1.4 billion relates to payments of principal and interest received from the Special Liquidators to IBRC. This is on foot of the floating charge over IBRC assets that NAMA acquired from the Central Bank following the appointment of Special Liquidators to IBRC in February 2013. “ @Joseph I’m with JG on this……the “analysis” is a complete fudge. Cash flow and profitability/performance are not the same things. Also, it has in any event been low lying fruit to date…..the tail dregs need to be dealt with….asset quality clearly tails off. If it was truly good, they would be clearly and openly demonstrating that (and paying themselves more money /bonuses). Have been around finance too long not to trust my instincts…..I have run mult-billion euro credit portfolios…..NAMA’s approach here would not satisfy the most junior of credit committees, believe me! The always excellent NAMAwinelake tells it like it is.No further comment necessary. ― “The dog that didn’t bark‖ in this year’s NAMA year end statement was profitability – there is no word whatsoever on NAMA’s profit for 2013. In the previous year’s statement – available here – NAMA devoted a full section to profitability. And in previous year’s, NAMA had been briefing journalists during open scheduled inter-views on profitability. Not this year, though… The view on here is NAMA is going to have a very difficult year in its 2013 accounts, UNLESS it can somehow draw down profits on disposed of assets. We have the manage-ment accounts for H1, 2013 which showed a profit after tax – but after an exceptional €193m of disposal profits – of €54m. There is little seasonality to NAMA’s business so the full year profit would be expected at around double the half year’s total, or €108m, except (a) the half year impairments were high – at €385m compared with €518m in the full year 2012 -and may presage accelerating impairments and (b) there has been a steep decline in rental receipts which would be ex-pected to continue as disposalsincrease. On the other hand, there has been some evidence of stabilization in the Irish com-mercial real estate sector, par-ticularly in prime offices and Dublin (and to a lesser extent other large urban areas) resi-dential property is clearly in-creasing. Since inception to H1,2013, NAMA has booked an after tax P&L loss of €649m, mostly driven by the €1.2bn loss in 2010 (and in turn, that year’s loss was driven by a €1.5bn impairment charge). In addition, and examining the capital sec-tion of NAMA’s balance sheet at H1, 2013, it has booked €400m in non-P&L losses (which appear to be provisions on derivatives and such like that may not be realized). NAMA claims to have total equity of €540m but this is only because it gets away with classifying the €1.6bn in subordinated bonds – the bonds it used to fund 5% of the €32bn consideration paid for the €74bn of par value loans – as an ―equity instrument‖. From this €1.6bn, it subtracts €1.1bn in losses to get a total equity of €540m.” Comments are closed.