National Asset Management Agency (Nama) chief executive Brendan McDonagh said on Thursday he still does not know what role he will go back to in the National Treasury Management Agency (NTMA), even though it is only weeks before his organisation is wound down.
McDonagh, who joined the NTMA in 1994, was given the task of leading the so-called bad bank in 2009 as it was set up to take over €72 billion of distressed commercial property loans at a discounted price of €32 billion from the Republic’s lenders.
Nama’s remaining assets are due to be transferred, along with eight of its remaining nine employees, to a new resolution unit in the NTMA by the end of this month. The unit will also become home to the remains of Irish Bank Resolution Corporation (IBRC).
The CEO will not transfer, he confirmed, adding that he remains in discussions with NTMA chief executive Frank O’Connor on his future role.
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“In 2009, I was told I had to do Nama. I didn’t really want to do it, to be honest,” he told Pac members. “And, after I finish Nama, I have a right to return [to the NTMA].”
He said that he has the right to go back at a level comparable to the grade he held in 2009, when he served as finance director. When questioned, he said he “won’t maintain” his current €430,000 annual Nama salary. He declined to comment further.
McDonagh used his final scheduled appearance before the committee as Nama’s CEO to defend the organisation’s record, rejecting claims that it had engaged in a fire sale of property-backed loans and that it had contributed to the State’s ongoing housing crisis.
He said that Nama “resisted the fire sale of assets” even as it came under pressure from the European Central Bank (ECB), part of the State’s crisis-era bailout troika, to dispose of loans between 2010 and 2011. He said that the International Monetary Fund (IMF) and European Commission, the other members of the troika, “had much more understanding” that disposals needed to take place over an extended period.
Having focused between 2011 and 2012 mainly on selling UK assets, McDonagh said it was the end of 2012 before Nama sold a large Irish portfolio – of about €1 billion of loans. He said there was an onus on Nama “to get the [property] market moving” again and to help Ireland return to the bond markets by showing it could sell down its portfolio.
People Before Profit-Solidarity TD Paul Murphy said that Nama “contributed to the housing crisis” in the State by selling loans backed by large parcels of land to “vulture funds” that have not developed the property. McDonagh said that Nama directly funded the construction of more than 14,000 homes, while it indirectly contributed to a further 30,000 being built, by funding infrastructure work, and planning applications to develop land before associated loans were sold on or refinanced by the developers.
He said that the State had an option around 2016-2017 to “repurpose Nama” to give it a greater housing mandate, but the decision was taken to set up the Land Development Agency (LDA). “Nama was never responsible for housing policy,” he said.
