NAMA due to wind up by the end of 2025

Legislation will be needed to establish the unit, which will also handle any outstanding issues from the liquidation of IBRC, the former Anglo Irish Bank, which is on track to finish this year.

“Nearly 15 years since the establishment of NAMA, and over 10 years since the commencement of the special liquidation of IBRC, it is now timely to make appropriate arrangements to facilitate them to conclude their work,” Minister McGrath said at the launch of a Department of Finance’s five-year review of the state’s ‘bad bank’.

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Mr McGrath added that, similar to the experience of other work-out vehicles internationally, it is likely there will be some residual activity for both NAMA and IBRC after their official end dates. “Therefore, a Resolution Unit will be established, resourced by the National Treasury Management Agency from 2026, to manage any such residual activity to completion.”

The review of NAMA points out that there could be some unresolved litigation at the end of next year, and some assets remaining which still have value for the State.

“It is currently assumed that loans c.€25m could still be the subject of ongoing litigation by end-2025. The litigation will likely involve both Irish and foreign court jurisdictions and its resolution will be largely outside the control of NAMA,” the review says.

The State’s ‘bad bank’ was set up in December 2009 in response to the banking crisis. It bought 11,500 loans from five banks, with a par value of €74bn. While their market value was just €26bn, NAMA bought them for €32bn.

By the end of last year, NAMA had generated €47.7bn cash from the portfolio of properties it bought. The agency has now transferred €4.25bn to the Exchequer, and its board expects that it will generate a total of €4.9bn by the end of next year, if market conditions in Ireland stay favourable in the meantime.

“This surplus, coupled with NAMA’s success in fully recouping the €5.6bn state aid State Aid element of what it paid for the loans it acquired, represents a significant outperformance relative to expectations at inception,” the Department of Finance review says.

The agency had reduced the total carrying value of its loan portfolio to €0.45bn by the end of 2023, and has mostly got out of its exposure overseas. By the end of 2023, only 1pc of its remaining portfolio was outside Ireland. Most of NAMA’s assets are in Dublin, comprised largely of residential development sites.

NAMA says it has facilitated the delivery of 34,000 residential homes, while 99pc of its original interests in the Dublin Docklands are completed or sold. “On completion, the [docklands] projects in which NAMA originally had an interest will deliver 4.2 million square feet of commercial space and 2,183 residential units across 15 sites,” the review states.

Minister McGrath said: “I commend the significant progress which NAMA has made, with a strong track record of achieving and exceeding key milestones over its lifetime. Internationally, the agency has been cited as one of the best examples of a successful implementation of a state backed asset management company in response to the global financial crisis.”

The minister also announced that once the liquidation of IBRC is wound down this year, any residual activity will be transferred to NAMA for management in 2025, and then to the new Resolution Unit from 2026 onwards.