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Banker who suggests future NAMA sell-off appointed as advisory group chair

Michael Geoghegan is the former CEO of HSBC and will be the chair of the NAMA advisory group set up by the Minister for Finance earlier this week.

Michael Geoghegan will carry out his role with NAMA on a pro-bono basis.
Michael Geoghegan will carry out his role with NAMA on a pro-bono basis.
Image: Vincent Yu/AP/Press Association Images

A FORMER BANK chief who has raised the possibility of selling-off the National Asset Management Agency (NAMA) in future years has been appointed chair of the organisation’s newly established advisory group.

Michael Geoghegan, the former chief executive of HSBC bank, will chair the NAMA Advisory Group which has been set up by the Minister for Finance Michael Noonan.

Noonan announced in his budget speech on Tuesday that he was setting up the group to advise him on NAMA’s strategy and capacity to deliver on its aim of disposal of property as well as its ongoing management of assets.

NAMA was set up in December 2009 in response to the financial crisis and acquired €75 billion of bad property loans from banks in an attempt to eventually sell them off and recoup some of the money that was put into the banks to prevent their collapse.

It has committed to repaying €7.5 billion of its debt by the end of 2013, €16.5 billion by the end of 2017 and €7 billion by end of 2019.

In a report into NAMA’s future role, carried out by Geoghegan, he has recommended that the organisation manage more loans directly, taking the 600 loans which are currently managed by borrowers from NAMA and instead manage them through the organisation’s own “debt restructuring team”.

Direct control of loans

“To give effect to this NAMA should recruit an additional 200 staff at a maximum cost of €25m,” the report says. Such a move may prove difficult politically to justify given the the billions of euro already poured into the financial sector by the government.

RTÉ reported yesterday that Geoghegan had also raised the possibility in meetings of selling off the entire agency eventually. It had previously been envisaged that NAMA would only dispose of all the loans on its books that it could.

But in concluding his report, Geoghegan recommends that NAMA must follow a strategic plan to meet the repayment schedule it has set out and warns: “Failure to achieve any of these targets both by amount or time would no doubt create uncertainty and should possibly lead to the assets of NAMA being given to one or more third parties to manage.”

Commenting on the review, Noonan said in a statement today: “I believe that the review is an important milestone for NAMA and will be of significant assistance to the Board as it completes the loan acquisition phase and begins to concentrate fully on the active management of its asset portfolio.”

The Minister said that the matters which have arisen in the “generally positive” report authored by Geoghegan will be discussed in due course.

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Hugh O'Connell

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