Paschal Donohoe, the Minister for Finance, will allow the National Asset Management Agency (Nama) to extend its work to 2025.
The Department of Finance has published a review of Nama, the agency set up to take over Irish banks' property debts following the financial crash, to assess how the organisation is progressing towards achieving its objectives.
Nama was due to be wound up in 2021, after it had finished getting a return for the State from the loans.
“I am also taking the opportunity of this review to finalise my plans in relation to the eventual wind-down and dissolution of Nama,” Mr Donohoe said following the review’s publication on Thursday.
The Minister said he would give Nama a short extension to work through a small number of remaining loans, between 2021 and 2025, by which time he expects those debts to be “resolved”. He said a “much reduced team” would handle this work and also manage ongoing litigation in which Nama is involved.
Nama expects to return a €4 billion surplus to the State once its work is completed. The agency has already repaid the €30.2 billion it borrowed to buy the banks’ debts after it began work in 2009.
EU rules
The European Commission issued a statement on Thursday confirming that the "limited" extension granted to Nama was in line with EU state aid rules.
The government established Nama to take over the banks’ loans in a bid to prevent the lenders becoming insolvent, and to generate the best possible return for the State from the debts.
Mr Donohoe said that Nama will keep its subsidiary, National Asset Residential Property Services, which buys homes and leases them to councils or approved bodies for social housing, until it can transfer this to "another State entity" in the future.
Nama has provided 1,372 properties for social housing through this subsidiary. Overall, it has provided 2,475 social homes to councils and approved housing bodies.
Nama bought loans on which borrowers owed a total of €74 billion for €32 billion from the Irish banks. The value of the land against which debts were secured had collapsed, leaving the banks facing insolvency.
The remaining debts that it holds are worth about 1 per cent of the original amount that the agency took on when it was founded.
Mr Donohoe reviewed Nama under section 227 of the Act that established the organisation. This requires the Minister to assess its progress and decide whether it should continue its work.
“Following the review I remain confident that Nama remains fully on track to achieve its overall objectives and so continues to be necessary having regard to the purposes of the Act,” Mr Donohoe said.
