NAMA has not reduced the principal on loans for borrowers. The Chairman of NAMA recently assured the Joint Committee on Finance, Public Expenditure and Reform that NAMA remains as focused as ever on pursuing each developer for the full amount owed.
He also explained that NAMA's minimum target is to recover what it has paid for the loans, plus any other moneys advanced as working capital or for development, plus interest on these moneys. This does not mean, however, that NAMA will stop at that threshold. Under Section 10(2) of the National Asset Management Agency Act, NAMA is required to operate so that it obtains the best achievable financial return for the State and that means pursuing all debts to the greatest extent feasible.
It is important also to point out that the agency's targets are based on the existing state of the property market. Overall, NAMA's best estimate at present is that it will, at the very least, recover the consideration it has paid for loans, plus any additional funding it advances to preserve or enhance asset values. It aims to recover significantly more than that and the extent to which it can do so will depend largely on the performance of the Irish and UK economies over the next five to seven years. If the outlook for property improves as a result of economic growth, NAMA's expectations for the realised value of the portfolio as a whole and for individual debtors will increase.
