It had a difficult birth, and since then a new Irish administration has struggled to maintain its tough talking agenda with Nama, says Emmet Oliver
Nama had been leading something of a charmed life since it was set up two years ago, but life for the gigantic ‘bad bank' became a lot more challenging when a new administration swept into government buildings in March.
Nama, which manages €30bn (£25bn) of assets, was set up at the height of the financial crisis and was something of a pet project of late Dublin finance minister Brian Lenihan.
Lenihan got the Nama legislation through the Oireachtas and he made its two crucial appointments — Brendan McDonagh as chief executive and Frank Daly as chairman. Lenihan also saw Nama as a way to get banks lending again, although everyone now agrees that particular ambition went unfulfilled.
Either way, Lenihan was seen as Nama’s most steadfast supporter, so when the new Labour/Fine Gael government took the reins in March, the agency was seen by many as living on borrowed time.
Fine Gael in particular outlined a series of radical reforms it was going to subject Nama to: “A new Fine Gael Government will make changes to the way Nama works to help reduce taxpayer exposures and to kick-start the economy,'' said its manifesto.
“A Fine Gael government will strengthen the transparency of Nama's operations and its management of the assets paid for by the taxpayer.
“The details of all non-performing loans acquired will be available for scrutiny on a public register, including the names of creditors, price paid by the taxpayer for loans and the actions taken by Nama''.
However as the year ended, this commitment had not been delivered on, and transparency from Nama is still selective — for example, the agency is not covered under the Freedom of Information Act, but yet it does publish a list of assets it has taken control of and is selling.
Despite the Irish government's obvious suspicion of Nama, the agency has not yet been radically restructured.
The one moment when it looked like Nama might be neutered was when high-flying ex-HSBC Michael Geoghegan was called in.
Geoghegan reviewed the agency for Finance Minister Michael Noonan, and broadly delivered a glowing assessment.
Yes, the agency needed to be more strategic and, yes, the board needs a broader mix of people, but in the main Geoghegan said Nama was where he expected it to be after two years. Still, it’s not out of the political woods yet.
An advisory panel, to be chaired by Geoghegan, is to be set up and will be filled by heavy hitters from the property and private equity worlds. The relationship between this panel and Nama's board has not been fleshed out yet, but it is clear that Nama will have a body looking over its shoulder.
Nama itself though has been getting on with its key task — selling down its assets in an attempt to make sure the taxpayer gets at least some level of return.
The outgoing year saw the level of sales starting to reach critical mass in the UK, even if Irish-based sales were minimal.
Nama has been accused of selling the most attractive parts of its loan book first — prime real estate in England — while hoarding less attractive assets, like development land in rural Ireland.
In some respects, the agency admits this is the strategy.
What nobody knows is what Nama paid for the specific assets it is selling.
While it discounted assets it bought from Irish banks by 58% on average, it does not break down what it paid. As a result nobody knows whether it is getting a return or a loss.
The ultimate calculation is as follows — the agency spent €30bn buying up loans from Irish banks, so it needs to bring in cash and hold assets to the same value by the time it winds up in around 10 years.
At this stage nobody knows whether it will get there.
In the meantime, assets have to be managed, and Nama has been castigated for paying developers for this — in some cases over €200,000 (£166,000) a year for the privilege.
Nama has said it either pays them, or pays less experienced receivers €180 (£150) an hour for the same job. No self-respecting economist can call the Irish property market ten years from now, although Nama got a huge fillip before Christmas when the government abandoned plans to scrap upward-only rent reviews, boosting Nama as a landlord to thousands of businesses and home owners.
Retailers were furious, but Nama clearly has strong lobbying power with the new administration, even if the two sides weren’t close allies before.