As part of its Annual Report for 2018, NAMA recently revised its projected surplus to be returned to the State to €4 billion. The realisation of this surplus depends on the success of NAMA’s ongoing deleveraging and completion of its Dublin Docklands SDZ and residential funding programmes.
Surplus funds may only be returned to the Central Fund once NAMA's debt has been redeemed in full, which is expected to be 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 at that time. 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.
As the expected date for NAMA’s redemption of its debt approaches, there is a possibility that a small number of loans may not be resolved by 2021 due to ongoing litigation that is largely outside NAMA’s control. In addition, there is a possibility that NAMA may also be left with a small residual loan portfolio where best value for the State may not be achieved through sale or disposal before the end of 2021. Such assets are currently expected to represent less than 1% of NAMA’s original portfolio.
Active consideration is underway regarding NAMA’s end of life strategy and the maximisation of the return of any surplus to the State in respect of these remaining assets. These considerations will be examined in my forthcoming Section 227 Review into NAMA’s achievement of its objectives which is due to be finalised shortly. I intend to use the publication of this review to make a decision as to how to best wind down NAMA in the context of the need to ensure that the State extracts maximum value from any residual assets remaining after 2020/2021.