NAMA toxic assets here are under £5bn
THE value of assets in Northern Ireland to be taken over by the Republic's National Asset Management Agency (NAMA) is under £5bn: much less than the £20bn of assets feared by civil servants.
At last week’s meeting with Finance Minister Sammy Wilson, the Irish finance minister Brian Lenihan gave a commitment to work with his northern counterpart in disposing of assets to avoid instability in the property market here that might lead to a further collapse in values.
Speaking to the Belfast Telegraph, Sammy Wilson said that the meeting had been “very satisfactory”.
He said: “There were a number of things we wanted to establish. The first was just how much exposure there was to Northern Ireland of the assets eventually to be taken over by NAMA and managed by them. It is much less than we expected.
“It is about £4.2bn: we thought it was somewhere about £20bn. It will be mostly in the form of land.
“The only other assets they will take over will be land where there were some physical developments, such as offices or housing, which can be used as security, or development that is partially completed, where they will manage it to completion so that it can be sold off.”
NAMA is due to be established this autumn with legislation expected before the Dail tomorrow.
It will take more than €90bn worth of debt from Irish banks so that they can be encouraged to start lending again.
Mr Wilson added: “The second thing we raised with him (Lenihan) was how they intend to deal with these assets.
“He gave an assurance they did not see NAMA being engaged in fire sales. And there is no benefit from NAMA's point of view or from the Irish government's point of view in doing that: you are likely to find it depresses prices even further.
“He made it quite clear that NAMA wants to manage these long term and these will be bought-in at a discount anyway.
“They don't want to have a huge levy at the end of it because of these things being sold at vastly reduced prices.”
Meanwhile Deputy First Minister Martin McGuinness yesterday raised the issue of NAMA at the first sitting of Stormont following the summer recess
He said: “The big concern here in the north and it is mainly in land banks, is that there could be a fire sale which would effectively have a very damaging and distorting effect on the economy.
“There is a commitment by the Irish government through Minister Lenihan that they are very conscious of the concerns that we have in the north and I think the recent meeting between Finance Minister (Sammy Wilson) and himself was very useful.”
Concern had been expressed in Northern Ireland that huge amounts of Republic-owned property north of the border could be sold off quickly, causing commercial prices to fall.
Finance Minister Sammy Wilson also highlighted a number of other issues discussed at the meeting with Mr Lenihan.
Agreement was reached between the two ministers that the management of NAMA's assets in Northern Ireland will have an involvement from the North.
“We agreed there would be an advisory committee from Northern Ireland and we would talk after the Bill (establishing NAMA) goes through about the composition of that advisory committee,” reported Mr Wilson.
“I will be suggesting names of people who would serve on it: people who have some knowledge of the market here in Northern Ireland, so at least we will have some input.”
Perhaps surprisingly, a strong rapport was apparently established between the DUP and Fianna Fail ministers at their first meeting. “I got on very well with him,” said Mr Wilson.
“He has got a lot of similarities to myself. He wouldn't win too much in the diplomacy stakes, which attracts me immediately to him. He probably shares a lot of views that I would share, on a range of issues.”
The two ministers intend to build on their initial contact.
“He is the kind of boy I reckon I can probably do business with over the next number of months,” said Mr Wilson.
“He agreed that on a one-to-one basis we should keep in contact, because both our interests are tied-up in this. So it was a useful first meeting and I look forward to working with him.”