IRELAND - The Irish government has confirmed its National Asset Management Agency (NAMA), or so-called ‘bad bank', has started to take €16bn worth of troubled real estate loans on to its books.

The country's finance ministry now expects NAMA to underwrite €81bn of troubled loans before the end of 2010.

The first tranche of these loans were secured against real estate assets, mainly in Ireland, and will be handed over at almost half their original book value at €8.5bn.

The average discount of 47% was a far higher ‘haircut' than initial expectations, which were around the 30% mark.

The loans are being transferred from four lenders: Allied Irish Bank, Anglo Irish Bank, Bank of Ireland and Irish Nationwide Building Society.

They include €3.5bn of investment property, €1.3bn of land (including development less than 30% completed), €800m in hotels, €500m of development property(greater than 30% completed) and €400m in residential assets.

Approximately €4.9bn of the assets are located in Ireland, while €3.2bn in Britain and the €400m are located overseas.

"NAMA is a key element in resolving the difficulties of the Irish banking sector," said Frank Daly, chairman of NAMA.

"The Board of NAMA's guiding principle to date has been to safeguard the interests of taxpayers by taking a scrupulously objective view of the value of the underlying assets and the security attaching to each and every loan.

We will remain resolutely focused on taxpayers' interests as our work continues in the months ahead," he continued.

Brendan McDonagh, chief executive of NAMA said: "Our sole focus at NAMA is to bring proper and disciplined management to these loans and borrowers with the aim of achieving the best possible return and to protect the interests of the taxpayer.

"We will assess each borrower's viability rigorously over the coming months as part of the business plan review process which will be a new start for all the parties involved."

He continued: "NAMA is willing to engage with an open mind to our acquired clients but I wish to reiterate that we require full disclosure of all material information and we will not waste time with borrowers who do not wish to cooperate."