Ireland's NAMA Raises Lifetime Profit Forecast to $1.95 Billion

  • First-half profit beats 2014's total of 458 million euros
  • NAMA selling 7.6 billion euros of par-value property loans

Ireland’s National Asset Management Agency, the nation’s bad bank, increased its forecast for the profit it expects to make over its lifetime by 75 percent as sales of commercial real estate loans accelerate in the recovering economy.

NAMA boosted the projection to 1.75 billion euros ($1.95 billion) from 1 billion euros previously, it said in a statement on Thursday as directors from the agency appeared before a parliamentary committee in Dublin. The state-owned company also reported that first-half profit beat the 458 million euros reported for the whole of 2014, without proving details.

The lifetime profit “will be recognized as a significant achievement in very difficult circumstances,” Frank Daly, NAMA’s chairman, told the hearing. The agency provided 5.6 billion euros of state aid to the nation’s banks as it paid more than the market value for loans it took over in 2010.

NAMA, which intends to wind up most of its business by the end of 2018, is benefiting from a surge in demand for Irish real estate as it sells loans tied to hotels, golf courses and office blocks. Investors from Blackstone Group LP to Cerberus Capital Management LP are buying billions of euros of debt from the agency as they wager on a recovery in property markets around Europe.

Hammerson Plc and Allianz SE’s real estate unit agreed to buy a group of Dublin shopping-mall loans, known as Project Jewel, on Monday for 1.85 billion euros from NAMA in the agency’s biggest sale since it was set up in 2009. It is currently marketing 7.6 billion euros of par-value loans, known as Project Arrow.

“Given the underlying profitability of the agency, the improving prospects for the collateral underpinning NAMA’s loans and receivables and the upside accruing from NAMA’s investment in its asset base, our view is that the ultimate surplus will top 2 billion euros,” said Philip O’Sullivan, an analyst with Investec Plc in Dublin.

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