Few institutions in the country divide public opinion as Nama does. To many it is an enduring symbol of the financial crash that led to its establishment, and a string of controversial loan sales have done little to improve its image.
The agency borrowed €31.8 billion to take loans linked to property developments and land speculation off the books of the main Irish banks at the height of the crisis.
By any standards, its task was monumental. Its critics, including Joseph Stiglitz, the Nobel prizewinning economist, argued that Nama was a waste of taxpayers’ money that would never be recouped.
Seven years on and Nama’s counter-argument has grown increasingly robust. It has redeemed 98 per cent of the senior debt issued to rid the Irish banking system of risky property loans. The remaining 2 per cent will be redeemed by the end of the year, three years ahead of schedule. The agency has exceeded expectations with the surplus it will deliver for the taxpayer. Its initial target was to give taxpayers back what they invested.
Yesterday that figure grew again from €2.3 billion to €3 billion. Frank Daly, the chairman of Nama, even countenanced the possibility that its forecasted surplus could rise by the time the agency is wound down at the end of the decade.
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It was not so long ago, he said, that the hurlers on the ditch predicted Nama would make a loss of €10 billion.“So just €13 billion out so far,” Mr Daly said.
Much of the criticism of Nama centred on when, and for how much, it sold off assets, particularly the sale of a portfolio of Northern Ireland property loans dubbed Project Eagle.
Seamus McCarthy, the comptroller and auditor-general, last year found the sale resulted in a “probable loss” to the taxpayer of £190 million (€220 million). A subsequent report by the public accounts committee found it was “not appropriate” for Michael Noonan, the finance minister, to meet with representatives of Cerberus, the American investment company, days before Project Eagle’s sale. Cerberus was announced as the winning bidder in April 2014.
Mr Noonan and Nama denied any wrongdoing but the reputational damage to both was significant.
A commission of investigation has been established and will eventually determine the truth. If Nama or Mr Noonan are found to have failed in their duty then it will be a matter for the government. The case for the defence is that hindsight is always twenty-twenty and that, overall, Nama’s work has largely delivered.
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Establishing Nama, the first bad bank of its kind in Europe, was a leap into the unknown. As Mr Noonan said yesterday: “There was no file in the department that you could put your hand on and take off the shelf so we had to create solutions.”
The solutions have by and large been successful. Had Nama held on to assets and not repaid its debt, Ireland would not be able to borrow on international markets as cheaply and the property market, for all its faults, would be on a par with Greece. Nama has not been without its controversies — and there could be more to come — but it has delivered, despite what many would have you believe.