Belfast Telegraph

Value of Nama's UK assets make possibility of a swap seem unlikely

By David Elliott

Nama has a lot to answer for. Its success as a "bad bank" which has been managing impaired property loans – ones which amount to more than the building or land is now worth – on the books of the Republic's banks, has been used by governments in indebted regions around the world as an example of how to deal with a property boom and bust.

Greece, Italy and Spain have all taken heed of the methods used by Nama in dealing with loans which were toxic when the agency took them on but which have been turned into something less poisonous and in some cases actually nutritious.

But it's the freedom this ring- fencing and removal of bad loans has given the Republic's banks which is one of the reasons the idea of removing RBS's burdensome debt has been put forward. Finance Minister Sammy Wilson suggested something similar a few weeks ago only to be met with raised eyebrows all round.

Divesting all its toxic debt is one suggestion but another one is the swap with the Dublin Treasury of Ulster Bank with some UK-based Nama assets.

In principle the idea makes some form of sense given Ulster Bank, which operates across the island of Ireland, has a big proportion of bad property debt, or impairment charges, compared to the rest of the RBS Group and represents a neat package which could be disposed of.

But in practice the swap is unlikely because the UK assets on Nama's books are some of the most valuable and most likely to prove successful in the long term. For that reason the Irish Treasury won't want to give them up.

Belfast Telegraph

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