Global General

Ireland's 'bad bank' acquires €71b in loans

(Agencies)
Updated: 2010-12-21 09:56

DUBLIN - Ireland's state-run "bad bank" has acquired property loans with a nominal value of 71.2 billion euros ($94 billion), its chairman told national broadcaster RTE on Monday.

Related readings:  European bailout of Ireland close at hand  Ireland gets a massive bailout  Ireland asks EU for loan  A beleaguered Ireland gets EU support, but no bailout

Ireland set up the National Asset Management Agency (NAMA) to purge the banking sector of risky commercial property loans but the large discount applied to the loans left gaping holes on banks' balance sheets which the state has had to plug.

Frank Daly told RTE's Primetime programme the agency had paid 30 billion euros for 11,000 loans from Allied Irish Banks, Anglo Irish Bank, Bank of Ireland, and building societies EBS and Irish Nationwide, equating to a discount of around 58 percent.

NAMA will acquire a further 16 billion euros of loans from Allied Irish Banks and Bank of Ireland under a bailout deal with the European Union and the International Monetary Fund.

The burden of shoring up its banking sector, brought to the brink of collapse by reckless lending, triggered the 85 billion euro EU/IMF bailout last month.

Daly said 60 percent of its portfolio had been subjected to due diligence.