Nama admits it's been forced to write off debts totalling £1.1bn
The Republic's bad bank Nama has written off debts totalling €1.5bn (£1.17bn) owed by 80 debtors to the agency, it has emerged.
That is according to Ireland's Finance Minister Michael Noonan, who said that the €1.5bn write-off equated to 2% of the original debt acquired by Nama from lenders. In a written Dail response to Michael McGrath TD, minister Noonan stated that "debt is only written off where all of the underlying assets have been realised, there are no further assets to be realised nor any additional recourse available to Nama to recover borrowings from the debtor".
Mr Noonan said: "Nama enters into such arrangements with debtors where it is expected that the exit arrangement will maximise the return to the state. I am advised that this may include debt compromise or settlement arrangements for a fixed number of years post-exit."
The minister also stated that, "in certain cases, where the debtor has met certain stringent or 'stretch' targets set by Nama, an arrangement may be entered into with that debtor to release them from their personal exposure, where there is no further prospect of recovery of borrowings from that debtor."
He pointed out that "such arrangements have no impact on the return to Nama in cases where no value can be recovered through the personal guarantees".
Mr Noonan added that "Nama has leveraged personal guarantees to obtain more than €900m in additional security for its loans, primarily by obtaining charges over previously unencumbered assets and through the reversal of prior asset transfers".
Details relating to the €1.5bn write-off are to be part of the Nama 2015 annual report due to be published later this month.
More than half of Nama debtors with debts of €18.5bn (£14.5bn)have exited the agency. It initially paid €31.8bn (£25bn) for a €74bn (£58bn) loan book.