Nama’s first-quarter profit dipped from €59 million in 2016 to €37 million this year as it generated less cash from loan sales.
The state’s bad bank recorded income of €1.1 billion in the first three months of the year compared with €1.3 billion in the same period last year.
Of the total income, €767 million related to the receipt of proceeds for two significant loan sales that were contracted in December 2016 but completed in 2017. Nama generated a further €0.2 billion in cash in the period from the end of March to May 31, bringing cumulative cash generated since its inception to €39.4 billion.
In June, Nama increased its projected surplus over its lifetime from €2.3 billion to €3 billion. The revision came after the agency reported an after-tax profit of €1.5 billion for 2016, its sixth consecutive year of profitability.
Nama generated €5.4 billion in cash last year, including €5 billion realised from the sale of loans and property.
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The agency has been criticised over its handling of loan sales. Critics have accused it of failing to ensure it achieved the best price in the sale of hundreds of loans under its control after it confirmed it sold €1.2 billion worth of loans in “off market” transaction since the beginning of 2014.
Nama has a policy of conducting loan sales on the open market where possible but made an exception to that policy on 240 occasions since 2014. Loans worth €795 million were sold to private parties, in 126 separate transactions, since January 2014.
Seamus McCarthy, the Comptroller and Auditor General (C&AG), last month said he would consider whether the sale of the €455 million Project Tolka loan portfolio to Colony Capital, a US real estate investment trust, should be investigated. Michael McGrath, the Fianna Fáil finance spokesman, had called on the watchdog to investigate the sale, which he said was concluded after an uncompetitive process.
Mr McCarthy ruled last year that the sale of another Nama loan portfolio, dubbed Project Eagle, resulted in a “probable loss” to the taxpayer of £190 million (€220 million).
Nama disputed the C&AG’s finding. It has also defended its disposal of assets and denied suggestions that it acted improperly in selling loan portfolios to overseas investment funds.
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Nama redeemed €1.14 billion of its senior bonds in the first quarter of the year and a further €950 million to the end of June. It has now redeemed €29.7 billion — or more than 98 per cent — of the original senior debt issued in 2010 and 2011 to acquire bank loans at the height the financial crash.
Nama’s senior debt now stands at €0.5 billion.
The agency said it intends to redeem the remaining senior bonds by the end of the year, thereby eliminating the state’s contingent liability as guarantor of the bonds.