Nama announces profit of 63 million euros but warns market disruptions could hurt housing construction

Ireland’s bad bank made a profit after tax of 63 million euros in the first nine months of last year, but warned of a possible downturn in construction this year.

In its latest quarterly financial statements, the National Asset Management Agency (Nama) said rising interest rates, infrastructure and planning issues could hurt housing construction.

“The Board continues to monitor economic and financial developments and their impact on Nama’s financial condition,” the agency said in a letter accompanying its quarterly report and financial statements for the three months ended September 2022.

“From Nama’s perspective, there is potential for some disruption to market and construction activity in Ireland and this may impact the pace at which Nama’s portfolio decreases in 2023.”

Nama delivered 532 residential units in the first nine months of last year, with another 487 under construction.

However, some of the other 1,214 units approved for funding could be at risk.

“Marketability is a significant challenge in the current market and it is possible that Nama will not advance funding for all 1,214 units.”

Nama has funded and “facilitated” over 28,000 new homes since its inception in 2009, almost half of which have been funded directly by the agency.

It estimates it can deliver around 18,200 more houses in the medium to longer term, most of them after its dissolution in 2025. But it warned some could prove unprofitable.

“Development of some of Nama’s secured sites may currently be hampered by one or more economic viability constraints, e.g. due to interest rates, infrastructure (roads, water, utilities, waste, etc.) or appropriate planning permission,” Nama said in his report.

Nama has “continued to make significant progress” on an office development in Dublin’s Docklands and retains a 20% interest in a 37.2 hectare property in Poolbeg West which it says has the potential for thousands of new homes and significant commercial and retail space . next to a school, cultural, community and public spaces.

It has delivered or “committed” 2,693 council housing and identified 7,577 from its secured portfolio as potentially suitable for council housing.

In the nine months to September 2022, Nama generated a total of €387 million in cash, with a further €100 million in the final quarter of the year. This brings the cash generated since 2009 to a total of 47.4 billion euros.

As of September 2022, Nama’s total assets were €1.6 billion. In the nine-month period, it generated rental income of almost €10.7 million. It spent 1.1 million euros on legal fees and 13.5 million euros on staff costs.

Since its inception in 2009, Nama has transferred EUR 3.5 billion to the state (EUR 3.9 billion including taxes).

In 2022, Nama increased its lifetime surplus forecast to 4.5 billion euros.