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NAMA Accounts

Dáil Éireann Debate, Wednesday - 19 December 2018

Wednesday, 19 December 2018

Ceisteanna (132)

Michael McGrath

Ceist:

132. Deputy Michael McGrath asked the Minister for Finance the projected surplus from the National Asset Management Agency; the return on investment this will represent; if the surplus will be received into the Exchequer when NAMA is wound up; and if he will make a statement on the matter. [53746/18]

Amharc ar fhreagra

Freagraí scríofa

I wish to advise the Deputy that it is expected that NAMA will substantially complete its work by 2020/2021 and that, over those two years, the Agency expects that a surplus currently projected to be €3.5bn will be available for return to the State. However it is important to note that this surplus has yet to fully crystallise. Its realisation depends on the success of NAMA's ongoing deleveraging, its Dublin Docklands SDZ programme and residential funding programme. These activities must be completed for the expected surplus to be earned.

In 2014, the NAMA Board approved an Entity Return on Investment (‘EROI’) target benchmark of 20%. The projected return as at end-2017 was 35%. The EROI benchmark is calculated based on the comparison of NAMA’s projected terminal surplus position with NAMA’s initial investment, as adjusted to exclude the €5.6 billion in State Aid which NAMA was required to pay to the Participating Institutions as part of the loan acquisition price.

As per section 60(2) of the NAMA Act 2009, NAMA may use surplus funds to redeem and cancel its senior and subordinated debt. Surplus funds may only be returned to the Exchequer once NAMA's debt has been redeemed in full in 2020.

Any NAMA surplus paid, while Exchequer positive, will not impact the general government balance, in line with EUROSTAT rules. It will be a decision for the Government as to how any surplus returned by NAMA will be utilised within the framework of the fiscal rules. However, the intention has always been to use such receipts from the resolution of the financial sector crisis to pay down our national debt and reduce our debt servicing costs.

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