Republic's taxpayers come first when loans are called in
Brendan McDonagh, chief executive of the National Asset Management Agency (Nama), explodes some of the myths surrounding his role
The people of Ireland deserve to know more about Nama. It is, after all, their agency and the only reason it was set up was to serve their interests. My team and I are conscious of that fact every day - indeed, it is the principle that guides every aspect of our work.
There has been much negative comment about Nama.
I have listened to people express fears that the agency was set up to bail out banks that lent too much and prop up developers who borrowed too much.
Yes, the banks needed to be cleansed and Nama has done that with respect to their riskiest exposures but it is not our job to prop up developers - it is our job to extract the maximum value from the loan portfolio we have acquired.
For many, Nama is an unwelcome legacy of an unprecedented banking crisis and a property crash of unparalleled magnitude.
The fact is that the Oireachtas saw fit to pass legislation to enable Nama to come into existence and it is my job and that of the board to execute the delivery of its legislative mandate. Nama should be seen as part of the solution, not part of the problem.
The agency has been accused of many things - many of them conflicting and often by the same voices who have no difficulty expressing contradictory positions.
Initially, it was that Nama would pay the banks too much for loans, then it became that Nama has not paid enough for the loans, that Nama is soft on developers, that Nama is pursuing developers too aggressively, that Nama should have a social remit, that Nama should only have a commercial remit.
The people of Ireland are free to question the actions we have taken (or not taken) and suggest things that we could have done or could do differently.
That is their right - indeed, it is their duty.
But one thing they should not doubt is our overriding aim to do the best job we can on behalf of the people of Ireland and recoup as much as we possibly can from each and every loan on our books.
Let me address some of the myths that have sprung up about the agency with facts:
Myth: Most of Nama's property is in poor locations and largely worthless.
Fact: The property assets underlying our Irish loans are worth €18bn (£15bn). Around €11bn (£9bn) of the total is in Dublin and surrounding counties and €14bn (£11.6m) of the Nama loan portfolio is outside Ireland where there is better liquidity.
Myth: The agency is sitting on tens of thousands of empty apartments in rural locations.
Fact: Nama's residential portfolio consists of 10,000 houses and apartments, predominantly in Dublin, Cork, Limerick and Galway - areas of strong demand among renters and house buyers.
Myth: Nama is a slow-moving, bureaucratic organisation.
Fact: The agency has made an average of 160 credit decisions every week since it was set up - 7,000 in total - with an average turnaround time of six days. It has approved loan advances of €1.1bn (£0.9bn), asset sales of more than €7bn (£5.8bn) and generated €6.6bn (£5.5bn) in cash for the Republic's taxpayer in 22 months since it acquired the first loans at the end of March 2010.
Myth: The agency is a major factor in the phenomenon of so-called 'ghost estates'.
Fact: Nama debtors account for just 29 of the 243 most problematic unfinished estates (known as Category 4) and the agency has provided funding of €3m (£2.5m) to complete urgent remedial work on these estates. We have exposure to 150 out of the 1,500 Category 3 estates, the next level in terms of problem estates.
Myth: Nama props up unviable hotels and allows them to compete unfairly at the expense of non-Nama hotels.
Fact: There are more than 900 hotels in Ireland. Nama has loans linked to just 121 operating hotels - 13% of the total - and will only support a hotel if its business is viable and based on a sustainable long-term business plan.
We have had interaction with the Competition Authority to show them that our debtors and receivers are not engaged in any market distortive practices.
Myth: Nama has a major problem with loss-making golf courses.
Fact: There are more than 400 golf courses in the country. Nama has exposure to just 20 - 5% of the total, most of which are linked to the hotels in its portfolio.
Nama is not a debt-collection agency. We are a workout vehicle rather than a liquidation vehicle - our job is to make the most of the loans we have acquired. But let's be realistic - we have debts to collect and we will do so. Debtors need to work with us and we have to work with them and we try hard to do so.
We are also prepared to work with businesses that are having difficulty paying their rent to landlords that are Nama debtors.
We have received 150 applications for a reduction in rents and we have, so far, agreed to reductions in 120 cases.
Work is ongoing to assess the remaining 30.
We issued a guidance note on assessing rent reductions, which is available on the Nama website, that we encourage tenants to read so that they are best prepared if they seek our help. There are times when it makes good sense to lend money to bring unfinished work to completion.
That is why we have approved more than €1.1bn in new funding, as we identify cases where lending this money can provide a better outcome for the taxpayer than not doing so.
Close to 50% of this funding is in Ireland - this is important at a time when credit is scarce.
There are also times when it makes good sense to serve the people of Ireland in other ways, such as making Nama-related properties available for job creation and social and community purposes.
We are happy to do this and will continue to do it whenever it is possible.
Our bottom line is simple - if something is in the taxpayer's best interest, that is what we will do.