As part of its Annual Report for 2018, NAMA revised its projected surplus to be returned to the State upwards 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 by March 2020. It is estimated that €2 billion will be transferred in 2020 with a further €1.5 billion being transferred in 2021 and €0.5 billion in 2022. This timeline is contingent on NAMA’s projected surplus of €4 billion remaining unchanged.
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.
In July I published the second Section 227 Review into the progress NAMA has made in achieving its objectives. Considering the advanced stage of NAMA's deleveraging activities I also took the opportunity to review the arrangements for the wind down of NAMA for the coming years. A copy of this review has been published on my Department's website.
On foot of the review I have recommended that NAMA be allowed additional time to work through a residual loan portfolio with a projected carrying value of c.1% of its originally acquired assets that is expected to remain at the end of 2021. A limited extension of NAMA will enable the Agency to maximise the value of this residual portfolio in the interest of the taxpayer and best fulfil the Agency’s commercial obligations under Section 10 of the NAMA Act. NAMA shall submit a detailed wind-down plan for its ultimate dissolution to the Minister for Finance by the end of 2021, and its operations shall not continue past end-December 2025.
NAMA’s extension will not impact upon the timeline for the transfer of its expected €4bn surplus.