NAMA make a profit of 90m on one transaction

athlonedub

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!!!!!

Nama to profit on London car park - The Irish Times - Wed, Oct 27, 2010

So Anglo advance a loan for £130m. NAMA buys it for €40m thus forcing Anglo to take a €90m (plus?) write down. NAMA then sells the property and appears to have recovered enough to recoup the loan in full and thereby make a €90m profit !!!!

Didn't they also make a profit recently on another Quinlan property?

So much for a "bankers and developers" bail out .........! What about all those threads about LTEV being a premium for the banks.....
 


MabroIRL

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I would not be ripping into the critics of NAMA because of one transaction making a profit. €90 million is a drop in the ocean of the double digit billions owed.

A trend is when you get 3 things going in a particular order if increasing or decreasing magnitude. I'll start cheering when NAMA shows such a trend. I won't hold my breath though.
 

hmmm

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The foreign property element was never expected to be as impaired as the Irish loans. Good to hear though.
 

sondagefaux

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Swings and roundabouts:

While Nama will make a profit on the transaction, the transfer of the loan to the agency at a large discount from Anglo led to the bank incurring a substantial loss, contributing to the €29.3 billion cost of the bank to the taxpayer.
 

DCon

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Swings and roundabouts:
Exactly. NAMA and any profitability needs to be looked at in the context of the State funding the haircut in the first place
 

Squire Allworthy

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Exactly my point - Anglo lose 90m on the transaction and NAMA make 90m on the transaction - how mucked up is that !

The UK property market is very different from that in Ireland. What percentage of the overall portfolio is located in Mayfair or indeed central London?

That said I would be surprised if they lost money on the overall UK portion.

Because you win a few Euro on the Lotto one week does not indicate that you will be ahead at the end of the year.
 

gijoe

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Wait until they start selling the 'prime development land' in the Midlands bogs - watch the profits roll in there!
 

Odyessus

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Wait until they start selling the 'prime development land' in the Midlands bogs - watch the profits roll in there!

NAMA has always said some of the assets they bought were rubbish but some were good quality.

Only time will tell if they win more on the swings than they lose on the roundabouts.
 

Raketemensch

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Exactly my point - Anglo lose 90m on the transaction and NAMA make 90m on the transaction - how mucked up is that !
Are you implying that Anglo were trying to lose as much money as possible? It sort of looks like it, doesn't it? Perhaps one day we will actually find out WHY.
 

athlonedub

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NAMA has always said some of the assets they bought were rubbish but some were good quality.

Only time will tell if they win more on the swings than they lose on the roundabouts.
But they were supposed to buy them all at their discounted valued - so there should be NO swings and roundabouts on the loans that NAMA individually valued. And a 225% profit in a matter of months is some swing !!!
 

Cael

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So Anglo advance a loan for £130m. NAMA buys it for €40m thus forcing Anglo to take a €90m (plus?) write down.

And who is paying Anglo's losses???
 

athlonedub

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Are you implying that Anglo were trying to lose as much money as possible? It sort of looks like it, doesn't it? Perhaps one day we will actually find out WHY.
No - you misunderstand. NAMA dictated to Anglo that this loan be taken over for €40m. As a result of this transfer, Anglo crystalised a loss of €90m. Now it transpires that this loan was fully recoverable

So the State put in €90m to plug the gap while NAMA makes a profit of €90m on that transaction.

My issue is that we were led to believe that NAMA would be taking these loans over at market value, having fully carried out a valuation exercise on these individual loans. How they they value something at €40m which they were then able to recover at €130m a few months later??

Perhaps it is a one off, but the suspicion is (and I posted to this effect some months back) that NAMA has taken over loan books by completely "over haircutting" (!!) forcing an immediate State funding requirement while it will make profits in the long term.

Yes, I know UK property is rebounding etc but this is not meant to be a game of swings and roundabouts where individual exercises have been carried out - and certainly not to that extent. The deviation of the outcome from the expectation makes the Department of Finance Budgetary estimates look almost close !!
 

Tigris Celtica

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Wait until they start selling the 'prime development land' in the Midlands bogs - watch the profits roll in there!
Ah shure they're going to make a killin' when the Chinese buy all that bogland to build "Little China" outside Athlone like Mammy O'Rourke has told us. The cute hoors ! .:D
 

Libero

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athlonedub said:
My issue is that we were led to believe that NAMA would be taking these loans over at market value, having fully carried out a valuation exercise on these individual loans. How they they value something at €40m which they were then able to recover at €130m a few months later??
Have you ever heard of property suddenly leaping value because of a rezoning decision?

Don't pretend you haven't!

Westminster City Council

Of course, while November 2009 was NAMA's valuation date for property, for all we know Anglo may still have that loan transfer subject to appeal meaning the 'profit' doesn't accrue to NAMA at all. As you've pointed out, it's all a bit of a zero-sum game between a state agency and a state-owned bank.
 

Raketemensch

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No - you misunderstand. NAMA dictated to Anglo that this loan be taken over for €40m. As a result of this transfer, Anglo crystalised a loss of €90m. Now it transpires that this loan was fully recoverable

So the State put in €90m to plug the gap while NAMA makes a profit of €90m on that transaction.

My issue is that we were led to believe that NAMA would be taking these loans over at market value, having fully carried out a valuation exercise on these individual loans. How they they value something at €40m which they were then able to recover at €130m a few months later??

Perhaps it is a one off, but the suspicion is (and I posted to this effect some months back) that NAMA has taken over loan books by completely "over haircutting" (!!) forcing an immediate State funding requirement while it will make profits in the long term.

Yes, I know UK property is rebounding etc but this is not meant to be a game of swings and roundabouts where individual exercises have been carried out - and certainly not to that extent. The deviation of the outcome from the expectation makes the Department of Finance Budgetary estimates look almost close !!
No, I do understand and it's interesting but with the lack of transparency it's hard to know what happened. Maybe the DOF based the loan potential on it's performance so far which was dismal. Maybe Anglo weren't trying very hard to get paid back. That would be wierd wouldn't it?:confused:
 

Squire Allworthy

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Have you ever heard of property suddenly leaping value because of a rezoning decision?

Is this not just a simple 'change of use' rather than a rezoning? Common enough, but as you point out does tend to increase value.
 

Odyessus

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But they were supposed to buy them all at their discounted valued - so there should be NO swings and roundabouts on the loans that NAMA individually valued. And a 225% profit in a matter of months is some swing !!!

Wait till you see the roundabouts! :-(
 

spidermom

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Well done to nama for acheiving what they are highly paid to do!!
We can only hope that the Paper of record will keep us informed of ALL Nama transactions!!


But should be remembered that "One Swallow does not........."!!
 


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