NAMA was established by the Oireachtas to remove systemic risk to the Irish banking system through the acquisition of land and development and associated loans from participating institutions and to obtain the best achievable return to the State from these acquired loans.
Since 2009, when it was established, NAMA has achieved significant milestones, including the valuation, purchase and transfer of relevant loans from the participating institutions. The establishment and development of the agency itself to carry out the tasks mandated to it by the National Asset Management Agency Act 2009 has also been an important achievement. The agency is now fully engaged in its core role of managing and selling the assets under its control with a view to achieving the best financial return for the State. The agency advises me that it has completed its initial engagement with close to 800 debtors. At this stage, it has assessed 99% of debtor business plans which has enabled it to identify and implement strategies to maximise the returns from the loans and underlying property assets.
The recently completed independent Geoghegan review found that NAMA had achieved a lot in a very short time and had done so while building the organisation from the ground up, and all of this while dealing with a very complex issue. Given the considerable work and achievements of the agency over such a short period, it is clear that its performance to date has been satisfactory. However, clearly much remains to be done over the coming years to ensure a successful outcome.
The NAMA board is reviewing its strategy in the light of developments in the Irish economy and in the property market since it published its business plan in July 2010. I am advised by NAMA that the key factors which the board considers critical in terms of NAMA's ultimate profitability include the performance of various economies in which its debtors' assets are located, the timing and sustainability of any recovery in the property market in Ireland, the sustainability of the UK property market, the availability of finance and the extent to which it can maximise the level of income produced by its loans and the property assets securing them.
Additional information not given on the floor of the House.
Following a recent exercise conducted by NAMA, the agency confirmed its expectation to at least break even. NAMA advises me that it is firmly on course to recoup for the taxpayer, at a minimum, the consideration paid to the participating institutions for the acquired loans in addition to funds advanced to protect and enhance the property assets securing these loans. Based on the agency's record to date, I have no reason to doubt the agency's confidence that it will achieve its targets over its lifetime, and I have asked the NAMA board to keep me informed of developments.
I note that the agency's own projections indicate that it expects to have completed its work within the initially projected ten year timeframe. This is an issue that will be kept under review. As the Deputy is aware, the National Asset Management Agency Act provides for an initial assessment by me of the extent to which NAMA has made progress in achieving its overall objectives and whether continuing NAMA is necessary for the purposes of the National Asset Management Agency Act. This assessment is to be carried out in 2013. In the interim, NAMA will continue to meet its extensive requirements for accountability, which include provision for the chairperson and CEO of NAMA to appear, if requested to do so, before a committee of the Oireachtas; reporting on a quarterly basis on a wide range of matters, including details in relation to loans, and which quarterly reports are laid before each House of the Oireachtas; preparing an annual statement setting out the objectives and the projections for the performance of NAMA for the year ahead, which again is laid before each House of the Oireachtas; and submissions of annual accounts to be audited by the Comptroller and Auditor General which are laid before each House of the Oireachtas. The Committee of Public Accounts may examine NAMA on these audited annual accounts.