NAMA s due to produce a new business plan this week.  It is speculated in the Irish Times that it will lay out three revised scenarios.

“In a worst-case scenario, Nama could end up losing several hundred million euro. If that is the case, the Government will levy the five participating banks – AIB, Bank of Ireland, Anglo Irish, EBS and Irish Nationwide – in an effort to make up the shortfall. In a second case, it could gain several hundred million. In a third ‘very best case’, it could make ‘a couple of billion’.”

It seems to me that the first case is not the the worse-case scenario.  If a ‘very best case’ is making a couple of billion, then it seems to me that a very worse case is losing a couple of billion, or several billion.  The government has consistently over-estimated the tax returns over the past couple of years, and there is nothing to suggest that they will get the NAMA estimates correct, especially since they’ve already downgraded the return by €4.8b and they are claiming to be ‘shocked’ by the state of the portfolio and its loan book.  Until the full loan book has been transferred in, it seems the best the agency can do is produce semi-informed guestimates about the state of the portfolio and whether it is going to cost the taxpayer dearly over its projected 10 year lifespan.  Losing €4.8bn in a year is not a good start and hardly inspires confidence.

Rob Kitchin

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