NAMA increases projected lifetime surplus to Exchequer to €4.25bn from €4bn; reports 2020 profit of €192m

The National Asset Management Agency (NAMA) has today published its Annual Report and Financial Statements for 2020. NAMA is reporting an after-tax profit of €192 million for 2020 – its tenth consecutive year of profitability. The Agency is also increasing its projected lifetime surplus to €4.25bn, subject to market conditions, from its previous projection of €4bn. When added to NAMA’s corporation tax payments to the State totalling €400m to date, NAMA now expects to contribute in the region of €4.65bn to the Exchequer over the course of its lifetime. NAMA is also announcing today that it will make a surplus transfer payment of €300m to the Exchequer later this month. This is NAMA’s third surplus payment to the Exchequer, following transfers of €2bn in June 2020 and €200m in March 2021, and will bring the total amount of surplus transfers to the Exchequer to €2.5bn. This will increase further to €3bn over the remainder of 2021 - with additional transfers totalling €500m scheduled for H2 2021. The remaining €1.25bn will be transferred in subsequent years.

Annual Report – key points (to end-May 2021):  During 2020, NAMA generated €0.92 billion in cash (2019: €1.34 billion), including €0.85 billion realised from the sale of loans and property (2019: €1.2 billion).  Total cash generation since inception stood at €46.6 billion at end-May 2021.  NAMA has been debt free since redeeming the last of its €31.8 billion debt in March 2020.  In June 2021, NAMA completed the sale of an 80% interest in Project Pembroke for €200.1m, which has capacity to deliver 3,800 homes (including c.950 social housing units), one million square feet of commercial space and various community and social amenities in a key location near Poolbeg, close to Dublin city centre. NAMA retains a 20% interest in this project, enabling the State to benefit from future development profits while limiting taxpayer exposure to development risk. The €200m price achieved significantly exceeded the €125m guide price.  In May 2020, NAMA acquired the 51% shares held by the Private Investors in National Asset Management Agency Investment DAC for €56.1 million, which paved the way for NAMA to begin making surplus dividend distributions to the Exchequer from June 2020.

Residential Delivery The report sets out the progress that has been made (and to end-May 2021):

• Between the start of 2014 and May 2021, NAMA funded or facilitated the delivery of 20,000 new homes.
• Of these 20,000 homes, 12,800 were directly funded by NAMA and 7,200 were delivered indirectly on sites for which NAMA had funded planning permission, enabling works, legal costs or holding costs before they were disposed of. NAMA’s residential delivery programme aims to strike an appropriate balance between direct and indirect delivery, de-risking a portion of the programme and delivering significant numbers of new units without putting taxpayer capital at risk.
• An additional 1,400 units are under construction or have funding approved in active developments.
• Planning permission has been obtained for another 4,600 new homes. An additional 7,400 units are in the planning system (planning applications lodged or being prepared).
• 68% of homes delivered by NAMA during 2020 are located in Dublin city and county, with 86% 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 (and to end-May 2021):  There is capacity for 4.2 million sq. ft. of commercial space and 2,183 residential units to be delivered in the Dublin Docklands when all sites in which NAMA originally held an interest are fully developed. This regeneration will accommodate 20,000 office workers and homes for 5,000 people.  Construction complete and sold: 42% of NAMA’s original Docklands interests have been completed and sold, representing 1.74m sq. ft. of commercial space and 411 residential units.  Construction underway: Construction is underway on 588,000 sq. ft. of commercial space and 195 residential units, representing 14% of NAMA’s original interests.  Construction complete: Construction is complete on 270,000 sq. ft. of commercial space, representing 6% of NAMA’s interests.  Sites sold for development: Sites with planning permission for 1.57m sq. ft. of commercial space and 1,427 residential units have been sold for development by other parties, representing 38% of NAMA’s original interests.

Key financial information:  Total cash generated from 2010 to end-2020 was €46.2bn, including €39.8bn from asset disposals and €6.4 billion from non-disposal income.  The Agency’s €32 billion deleveraging programme was 97% complete at end-2020, with the carrying value of debtor loans reducing to €0.85 billion at end 2020.  NAMA’s holdings of cash, cash equivalents and liquid assets stood at €1.3bn at end-2020 (2019: €3.9 billion).  Total corporation tax paid to the Irish Exchequer by NAMA is close to €400 million after a tax charge of €19 million was recorded for 2020 (2019: €30 million).  NAMA’s expected lifetime contribution to the Exchequer, between the projected surplus of €4 billion and corporation tax payments to date of €400m, is €4.65bn.  As at end March 2021, the loans of 173 debtors remained under NAMA management; 103 were in support or forbearance strategies while 70 were the subject of enforcement action.

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 2020, the Agency had delivered 2,614 homes for social housing in 20 out of 26 counties, exceeding the original target of 2,000 units by 30%.  In total, NAMA offered over 7,000 units to local authorities for social housing; however, many of these units were either not required at the time or subsequently became unavailable.  It is estimated that 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 resolution strategies in place.

The Minister for Finance, Paschal Donohoe TD, said: “I welcome NAMA revising upwards its projected lifetime surplus from €4 billion to €4.25 billion with €2.2 billion of this having already been transferred to the Exchequer. This highlights the positive work which NAMA continues to undertake despite the challenging economic environment which it has been operating in over the past 12 months.”

NAMA Chief Executive Brendan McDonagh said: “Our strong performance in 2020, our tenth year of profitability in a row, was delivered against a difficult backdrop, with the pandemic creating significant uncertainty and operational challenges. €3 billion in cash will be paid to the Exchequer by NAMA by end 2021. 2021 sees another milestone achieved with over 20,000 residential units delivered. Our team demonstrated exceptional resilience and flexibility to drive this profitability and to continue extracting the maximum value possible from our remaining portfolio. While many challenges remain, we aim to continue generating profits for the State while successfully delivering much-needed new homes; social housing; office and commercial space; and major projects in the Docklands and Pembroke that will leave a lasting positive legacy for decades.
I thank the NAMA Chairman, the Board and the people working throughout the Agency for the commitment, dedication and professionalism they display every day.”

NAMA Chairman Aidan Williams said: “The strength of NAMA’s continued profitability has allowed the Board to increase the Agency’s projected lifetime surplus to €4.25bn. This is a remarkable achievement that will provide valuable financial resources for the State and allow everyone to share in a dividend from NAMA. 2020 was a year of significant milestones for NAMA. We began the first of a number of transfers from our lifetime surplus to the Exchequer and successfully completed a 10-year programme of eliminating the debt that NAMA issued to acquire its loans at inception. But there is still a lot of work to do to maximise the contribution we can make to the State. We remain resolutely focused on managing our remaining assets with one overriding goal – generating the greatest achievable financial return in accordance with the mandate given to us by the Oireachtas. I thank our Board, staff and management team for their ongoing efforts to deliver the continued progress that we are reporting today.”