May 4, 2011 / 12:13 PM / 9 years ago

UPDATE 1-Irish "bad bank" loss soars on impairment charge

* Q4 loss of 678 mln euros vs 35.5 mln in Q3

* Loss due to 1 bln euros impairment charge

* Says 23 percent of portfolio is performing

(Writes through, adds detail)

DUBLIN, May 4 (Reuters) - Ireland’s state-run National Asset Management Agency (NAMA) took a 1-billion-euros ($1.5 billion) charge to cover potential losses from the loans it has acquired from lenders, sending its fourth-quarter loss up to 678 million euros.

Created to purge Irish banks of their risky land and development loans, NAMA said in its unaudited accounts that just 23 percent of its portfolio was performing. NAMA expects this to rise to 25 percent if it acquires residual loans with a nominal value of 3.5 billion euros in coming months.

Its loss in the third quarter was 35.5 million euros.

Up to the end of March this year, NAMA had acquired loans with a nominal value of over 71 billion euros covering assets ranging from skyscrapers in London’s Canary Wharf to agricultural land in the Irish countryside.

The agency’s harsh discounting of the loans — it has shelled out just shy of 31 billion euros for the portfolio meaning a discount of nearly 60 percent — triggered large holes on banks’ balance sheets, which the government has been forced to plug.

Stung by criticism it has been soft on property developers, whose dizzying deals fuelled Ireland’s financial crash, NAMA has seized assets and taken legal action against developers it views as uncooperative in recent months.

“The opening months of 2011 have been exceptionally busy as NAMA moved from a period of intensive analysis of the position of the largest individual debtors to the next phase of the project where the focus is on identifying those we believe we can work with and moving others into the enforcement process,” Chairman Frank Daly said in a statement.

Over three quarters of NAMA’s non-performing loans are more than 120 days in arrears and the agency said it was addressing this issue as it reviews developers’ business plans.

By the end of last year, it had reviewed the business plans of its 30 largest debtors, representing 37 percent of its portfolio. It has come to an agreement with 16 of them, is close to a deal with two others and has started legal action against seven. It is continue to negotiate with the remaining five. (Reporting by Carmel Crimmins; Editing by Louise Heavens) ($1=.6751 Euro)

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