Politicians and citizens of Ireland are upset after the newspaper Irish Examiner uncovered that the National Asset Management Agency (NAMA) has paid more than €115 million on consultants over the past 2.5 years. The public sentiment turned against the board of directors of the NAMA as the institution is responsible for safeguarding a large fraction of Irish mortgages and property loans.
The biggest fee-earner is KPMG (€18.1 million), followed by PwC (€13 million), Ernst & Young (€8.4 million), Alvarez & Marsal (€6.6 million), Deloitte (€4.8 million) and FTI Consulting (€4.5 million). In total, the NAMA worked with more than 100 different consulting firms.
National Asset Management Agency
The National Asset Management Agency was established in December 2009 by the Irish Government to address the serious problems in its banking sector. During the crisis, the NAMA functioned as a “bad bank”, acquiring poor property development loans from Irish banks in return for government bonds. The Agency acquired loans of approximately €74 billion from participating financial institutions. Without the NAMA, these banks would have had to bear the losses, which would have led to the downfall of several of the major Irish banks.
Following the publication of the figures, Irish Finance Minister Michael Noonan confirmed the numbers to the media and provided a breakdown of the professional fees into eight separate categories. The most lucrative area relates to “loan valuation and related due diligence” in which five firms shared € 30 million. The second largest category was “portfolio management fees” (€19.2 million shared by 34 firms) followed by “legal due diligence” (€14.3 million shared by 28 firms). Other categories included “property due diligence” (€12.4 million), “legal fees” (€9.4 million), “financial and tax advice” (€6.47 million), “borrower recoverable costs” (€3.4 million) and “auditing and accounting costs” (€2.5 million).