Monday January 17 2011
THE portfolio of smaller land and development loans passing from AIB and Bank of Ireland to NAMA is 20pc smaller than originally expected, NAMA boss Brendan McDonagh has confirmed, writes Laura Noonan.
The news comes six weeks after AIB and Bank of Ireland were told to transfer all their land and development loans to Nama, eliminating a previous threshold of €20m.
At the time, the Department of Finance expected Nama to take on an extra €16.6bn of loans, bringing the agency's total portfolio to about €90bn.
Appearing before a Public Accounts Committee meeting last week, Mr McDonagh said the "figure that's emerging" for the pot of those smaller loans is "probably in the region of €13bn".
Mr McDonagh told reporters the loans were expected to be transferred across by "mid year".
The Central Bank is expecting the banks to take a combined €1.4bn hit on the amounts Nama pays for the loans versus the amounts the banks are holding them at.
The bulk of that €1.4bn is understood to relate to AIB. If the portfolio of loans transferring from AIB is significantly lower than expected, then AIB's hit on transfer may shrink.
AIB in the firing line again!