Irish Economy
Markets: NAMA reports "profit" of €211m in 2013
By Finfacts Team
May 27, 2014 - 4:31 PM

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The National Asset Management Agency (NAMA), the State's toxic property loans agency, today published its Annual Report and Financial Statements for 2013, its fourth year of operation.

The agency said it expects to redeem €2.5bn worth of Government debt used to purchase loans from Irish banks next month, which would bring to €13bn the total of debt redeemed out of over €30bn advanced by the State to pay the banks for transferred loans

NAMA reported a profit of €211m year despite a jump in the provision to cover expected losses on some of its loans.

We said last week: [NAMA is likely to be wound up before its original expiry date of 2020 and Frank Daly the chairman who is a retired civil servant, has said he was “quite optimistic” about the agency achieving "a surplus for the taxpayer in the end." This is as illusory as the tax avoidance related-smoke that accounts for almost half of Ireland annual services exports of €94bn. By the end of 2011, a total of €74bn in loans had been transferred to NAMA by the five participating banks and €31.8bn has been paid as consideration to the institutions, an overall discount of 57%. - - the State injected €64bn into the banks to cover losses.]

Key points include:

  • For 2013, NAMA reports a profit after impairment, tax and dividends of €211m;
  • Operating profit before impairment in 2013 was €1.2bn, a 45% increase on 2012;
  • The impairment charge for 2013 was €914m, up from €518m in 2012 following a comprehensive review of impairment provisioning, specifically that relating to Irish landbank assets and the smaller debtor connections;
  • Cash generated in 2013 was €4.5bn, which includes the proceeds of asset disposals by debtors and receivers and also non-disposal receipts, mainly rental income;
  • Total Senior debt bond redemption of €10.5bn – 35pc of the total – with plans to redeem another €2.5bn by end-June and a further €2bn by end-2014. By the end of 2014, NAMA’s target is to have redeemed a total of €15bn of its Senior Debt, 50% of the amount it originally issued to acquire loans;
  • NAMA said: "From inception to date NAMA has generated €18.6bn in cash, including €14.1bn from asset disposals. €3.5bn of this has been generated in the first five months of 2014. NAMA has already exceeded its full-year target for 2014 for paying down its debt; its original target for paying down debt in 2014 was €2.5bn but it now expects to pay down €7.5bn";
  • Like-for-like administration costs (excluding costs relating to the liquidation of IBRC) fell by 3% in 2013. NAMA’s cost/income ratio is less than 3% which compares very favourably with the international average for comparable entities which is of the order of 6%;
  • The accounts also reveal that NAMA has built up equity and reserves of €810m, up from €412m at the end of 2012. NAMA’s cash balances increased to €4.4bn at the end of 2013.

Economic View: Job friendly growth still intact; Juliet Tennent of Goodbody comments - - "Employment data has provided one of the best indictors of the recovery in Irish domestic economy over the last year with the Q1 employment data, released yesterday, indicating that positive trends, albeit at a slower pace, have continued into 2014. While quarterly growth slowed to 0.1% in the quarter, from 0.8% in Q4, on an annual basis employment grew by a still impressive 2.2% (3.1% yoy in Q4 2013). The unemployment rate also continued to move in the right direction falling to 12% in February and estimated by the CSO to have fallen further, to 11.8%, in April. This represents a fall of over 3 percentage points from the 15% high seen in Q1 2012.

It is also of note that full-time employment growth*, at 3.3% yoy, continues to lead the way. This is a sign that employers are confident about the sustainability of the recovery.

Despite the slowing in the pace of employment growth, the recovery in the labour market remains in train. While this will support consumer spending, weak earnings growth and deleveraging will continue to act as a headwind and we expect consumption to grow by a modest 1.3% in 2014."

*This is linked to an over-estimate of jogs growth in farming -- see below.

Finfacts: Irish Economy 2014: Number of employees remains below bailout quarter of 2010

US Markets

In New York Tuesday, the Dow rose 68 points or 0.41% to 16,674.

The S&P 500 added 0.54% and the Nasdaq advanced by 0.89%

US benchmark updates

Asia Markets

The MSCI Asia Pacific Index (MXAP) slipped 0.2% to 141.27 at 6:10 p.m. in Hong Kong after yesterday reaching its highest close since Dec. 3.

Japan's Nikkei 225 rose 0.23%; China's Shanghai Composite slid 0.34%; South Korea's KOSPI fell 0.63% and Australia's S&P/ASX 200 dipped 0.2%; and in Mumbai, the Bombay Stock Exchange the S&P BSE India Sensex Index declined 0.68%.

Europe Markets

In Europe, the Dow Jones Stoxx Europe 600  is up 0.25% in mid afternoon trading Tuesday.

In Dublin, the ISEQ  is up 0.45%.

Glanbia is up 0.73%%.

European Benchmarks

Irish Share Prices

Euribor Rates

AIB Daily Report

Bank of Ireland Daily Report

Currencies

The euro is trading at $1.3619 and at £0.8109.

For live currency updates, check the right-hand column of the Finfacts home page.

The US dollar fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.

Commodities

The Baltic Dry Index, a measure of shipping costs for dry commodities, hit an all-time high of 11,771 on May 21, 2008. From that time it reversed and on the 5th of December, 2008 it hit a low of 663 - - close to a 1986 low.

On Thursday, July 15, 2010, the index fell for the 35th straight session, by 9 points, or 3.11%, to 1,619 points, Bloomberg report.

On Monday in London the BDI closed down 2 points or 0.21% to 964. The index is down 57.66% year to date and up 16.71% in 12 month period.

The index rose by 220% in 2013 to 2,237.

Global rebalancing — the tanker scrapyard index?

Crude oil for July 2014 delivery is trading on the Chicago York Mercantile Exchange (CME/Nymex) at $104.10 down 25 cents from Monday's close. In London, Brent for June 2014 delivery is trading on the International Commodities Exchange at $110.25. The North Sea benchmark accounts for two-thirds of the global market.

Finfacts, July, 15, 2013: US West Texas Intermediate oil benchmark jumps in July - - margin between WTI and Brent falls.

Gold spot price

The spot price of an oz of gold is trading on the CME in Chicago at $1,277.40 down $14.20 from Monday's closing - - the gold price fell 28% in 2013, the biggest annual plunge since 1981.

Gold had hit a record high of $1,921.15 a troy ounce on Sept 06, 2011.

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