Nama makes final €56m payment to investors with taxpayers next

NAMA has made a final €56m payment to private investors who took a stake in the bad bank when it was set up.

The payment clears the way for Nama to start returning cash to taxpayers, including an imminent €2bn payment.

Private investors, who now include a pension fund for Church of Ireland clergy, put €51m into Nama when it was created in return for a 51pc shareholding in a convoluted structure to keep the agency’s then vast debts off the State’s books.

The structure didn’t give the private investors control of the agency or rights over its billions in assets, but did promise a regular dividend and a possible 10pc extra recovery, worth €5m, at the end of Nama’s existence, depending on it meeting targets.

The €56m payment yesterday includes the original €51m plus the maximum €5m but represents just a tiny fraction of Nama’s surplus – which is expected to be around €4bn.

Dividends paid out to private Nama investors ranged from €5m in 2011 to just €272,000 last year.

The dividend changed because it was calculated based on the yield on 10-year Irish Government bonds.

Ironically, if the investors had instead bought 10-year Irish Government bonds they would have reaped dramatically bigger returns.

In total, private Nama investors were paid just over €14m in dividends, according to information from the Department of Finance.

In 2009, three investors – Irish Life, New Ireland Assurance and Percy Nominees – held all the shares, but some have since been sold on. New Ireland retains a stake, while money managers including funds that handle money for the Church of Ireland, UK investor Nortrust and US-based BNY Custodial later took over stakes.