Republic’s bad bank trims costs
Published 28/05/2010 | 10:26
The Republic's bad bank will not cost significantly less than €200m a year, it emerged yesterday, as the organisation refines its original business plan.
At that time fees and expenses run up by NAMA were expected to hit €240m a year, providing a bonanza for accountants and lawyers.
But after completing several tender competitions, the agency has managed to slash its controversial €240m running costs. Fine Gael and Labour have both criticised the running costs and demanded an itemised breakdown of the fees the agency will pay out to lawyers, accountants and insolvency experts.
The agency, which has imposed a 47% discount on its first tranche of loans, has managed to cut costs by picking lower cost advisors and it has also managed to park a larger amount of the costs with the banks taking part in NAMA.
Sources said the final annual running costs are likely to be “substantially'' down on the original €240m cost.
Based on this figure NAMA was on track to cost €2.6bn over 10 years. If the new cost base is €200m, the cost over 10 years would shrink to €2bn.
The agency warned that “this |estimate and amounts incurred each year could turn out to be less, the overall estimate is considered to be the most reasonable assumption that can be made at this stage''.