An update on the figures behind NAMA.
- NAMA will pay €54bn for €77bn of loans. The property which these loans are secured on has a current market value of €47bn. NAMA is paying an extra €7bn based on the “long-term economic value” of this property.
- This €77 billion, estimated by the banks, is made up of approximately €49 billion land and development and approximately €28 billion associated loans.
- The loans identified for potential transfer consist of almost 2,000 customers with around 21,500 loans.
- The breakdown among the five institutions is: Anglo Irish €28 billion, AIB €24 billion, Bank of Ireland €16 billion, EBS €1 billion, Irish Nationwide €8 billion.
- Around €9 billion of the €77 billion is interest roll-up, or interest payments postponed.
- 66% of the loans are in the Republic, 21% in Britain, 6% in Northern Ireland, 3% in the US and 4% in Europe.
- The NAMA figures are based on estimates that Irish property prices have fallen by an average of 50% since the loans concerned were given.
- Property prices will have to increase by 10% over the next ten years for NAMA to make a profit.
That’s the main information so far. No detail was given yesterday by Brian Lenihan on how much money the five banks will need in the next few months after its loans are put into NAMA.
The banks will need to be recapitalised once their loans are transferred. If the government has to invest more money into the banks, they will be taking ordinary shares and therefore it could end up owning a majority stake in either AIB or Bank of Ireland i.e. a part nationalisation.
Based on the share price increases in both AIB and Bank of Ireland today, it looks like investors are happy with NAMA.
So what do you think of NAMA?
The above figures are from rte.ie