NAMA increases its projected lifetime surplus to €4 billion; reports 2018 profit of €795 million

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NAMA increases its projected lifetime surplus to €4 billion; reports 2018 profit of €795 million

The National Asset Management Agency (NAMA) has today published its Annual Report and Financial Statements for 2018.

NAMA reported an after-tax profit of €795 million for 2018 – its eighth consecutive year of profitability – representing a 65% increase on its 2017 profit. This has enabled NAMA to increase its projected lifetime surplus, subject to market conditions prevailing, to €4 billion (previous forecast €3.5 billion).

Annual Report – key points:

  • During 2018, NAMA generated €3.27 billion in cash (2017: €2.56 billion), including €3.14 billion realised from the sale of loans and property (2017: €2.43 billion).
  • Having completed the redemption of its €30.2 billion senior debt in three years ahead of schedule in 2017, NAMA used its strong cash generation to begin redeeming its €1.6 billion subordinated debt in 2018. €529 million of this subordinated debt was redeemed during 2018 (33% of the total).

Residential Delivery

The report sets out the progress that has been made:

  • Between the start of 2014 and end-May 2019, NAMA funded or facilitated the delivery of over 14,000 new homes, with 10,024 funded by NAMA and 4,000 delivered on sites for which NAMA had funded planning permission, enabling works, legal costs or holding costs.
  • An additional 3,200 units are under construction or are funding approved in active developments
  • Planning permission has been obtained for another 4,000 new homes.
  • 70% of homes delivered by NAMA are located in Dublin city and county, with 90% located in the Greater Dublin Area (counties Dublin, Meath, Kildare and Wicklow).

Dublin Docklands SDZ

The report sets out the progress that has been made:

  • 100% of NAMA’s original interests in the Docklands SDZ, representing 4.2 million square feet of commercial space and 2,200 residential units are under construction, or have been completed or have been sold with the benefit of planning permission.
  • To date, NAMA has facilitated the construction of 1.14 million square feet of commercial accommodation and 190 apartments.
  •  NAMA retains an interest in sites currently under construction that will deliver 1.46 million square feet of commercial space and 416 residential units.

Key financial information:

  • Total cash generated from 2010 to end-2018 was almost €44 billion, including €37.8 billion from asset disposals.
  • The Agency’s €32 billion deleveraging programme was 94% complete at end-2018, with the carrying value of debtor loans reducing to €1.9 billion at end 2018.
  • NAMA’s holdings of cash, cash equivalents and liquid assets stood at €3.2 billion at end-2018 (2017: €1.25 billion).
  • Total corporation tax paid to the Irish Exchequer by NAMA reached €316 million after a tax charge of €109 million was recorded for 2018 (2017: €63 million).
  • NAMA’s expected lifetime contribution to the Exchequer between the projected surplus of €4 billion and projected total tax payments of €400m is €4.4 billion.

Annual Report – other key points include:

  • Social housing: NAMA has invested in the region of €350 million in the repair and purchase of homes for social housing which have been leased or sold to approved housing bodies and local authorities.  By end-April, the Agency had delivered 2,544 homes for social housing, representing 93% of the 2,729 NAMA properties for which local authorities confirmed demand. Over 8,000 people have been housed in social housing delivered by NAMA.
  • Unfinished Housing Estates: all 335 estates to which NAMA had an exposure in 2010 have now been resolved or have active resolution strategies in place.

The Minister for Finance and Public Expenditure & Reform, Paschal Donohoe TD, said:

I welcome NAMA reporting a strong profit for 2018 and am pleased that the Agency has increased its expected lifetime surplus to €4 billion. I thank the NAMA Board and staff – in particular its Chairman, Frank Daly, and its Chief Executive, Brendan McDonagh - for their efforts in achieving this.I look forward to NAMA’s continued success as it works to achieve its objectives.”

NAMA Chief Executive Brendan McDonagh said:

“2018 saw another excellent financial performance from NAMA, as we made a significant profit for the eighth year in a row and increased our projected lifetime surplus to €4 billion, subject to market conditions. On top of this NAMA expects that it will have paid taxes to the Exchequer in the region of €400 million, bringing its overall contribution to a projected €4.4 billion.

Much of this surplus represents the outcome of years of persistent, patient and intensive work to overcome obstacles, take advantage of market opportunities and maximise value for the State. Our strong financial performance has been complemented by similar contributions to the State in areas such as social housing, supporting businesses, improving housing supply and regenerating the Dublin Docklands. I thank the NAMA Board and particularly the Chairman, Frank Daly, our executive team and the wider NAMA staff for their commitment to delivering such a favourable outcome in NAMA’s 10th year.” 

NAMA Chairman Frank Daly said:

NAMA has come a long way in the 10 years since the announcement of its proposed establishment in April 2009. We faced an enormous task at the outset but, ten years on, in my final year as Chairman, NAMA is within sight of completing this task successfully and, in addition, delivering a substantial surplus to the Exchequer. We remain focused on extracting the maximum value for taxpayers from the assets we control and on completing the residential delivery and Dublin Docklands work that will bring tangible benefits to Irish society and the Irish economy for decades to come. We leave lasting examples of the way in which we met the objectives set for us by the Oireachtas back in the uncertain days of 2009. NAMA’s success is Ireland’s success. I thank my colleagues on the NAMA Board, past and present, the CEO, Brendan McDonagh, and everyone who has worked for NAMA for their huge efforts in making this success a reality.

Article Published: 30/05/2019