Tuesday, August 16, 2022

Irish ‘bad bank’ retains surplus guidance amid market risks

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DUBLIN (Reuters) – Ireland’s state-run “bad bank” paid a 2 billion euro surplus to the government on Wednesday and retained its guidance that it would double by the time it finishes selling properties related to the soured loans it acquired a decade ago.

The National Asset Management Agency (NAMA), established in 2009 during a crash that halved Irish property values, used 32 billion euros of debt to rid Ireland’s mostly nationalised banks of risky property loans with a face value of 74 billion euros.

NAMA, which has repaid all the debt, said its deleveraging programme was 96% complete at the end of 2019 but that it would have to mitigate the risks presented by the changed coronavirus-related economic backdrop to maximise the full surplus.

The surplus had been earmarked to pay down some of Ireland’s high national debt. But with the government borrowing heavily to keep the economy afloat, Finance Minister Paschal Donohoe said it would instead help support individuals and firms impacted by COVID-19 in the coming months

“This repayment will materially reduce the level of borrowing needed to get us through this crisis. The money has been earmarked for spending and will greatly assist the government,” Donohoe said in a statement.

(Reporting by Padraic Halpin; Editing by Mark Heinrich)

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