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Irish Times
14-07-2025
- Business
- Irish Times
The Irish Times view on the State's national debt: essential to recognise the risks
The National Treasury Management Agency (NTMA) has been the subject of some unfortunate headlines in recent days, following the payment of some €5 million to a bogus account from one of its subsidiaries, the Irish Strategic Investment Fund. It goes without saying that the decisions and systems which allowed this to happen must be investigated and all efforts made to get the money back. There is a message here, too, for the public about the increasing sophistication of financial scams. The revelation came as the NTMA published its 2024 annual report and its headline results for the first half of this year. Here, the news is broadly positive. While Ireland's national debt is still high in cash terms – at around €218 billion at the end of last year – it has fallen as a share of national income. Also, the cost of servicing the debt remains at a relatively modest €3.2 billion each year and is unlikely to increase much in the near future. This reflects a limited amount of fund-raising by the State in recent years due to the strong state of the public finances and also the fact that much of the debt is locked in for a significant period of time at fixed interest rates. So far in 2025, the NTMA has issued €5.25 billion in new borrowings – up to recently the running total at this stage of the year would typically have been twice that amount. The NTMA deserves credit for its management of the national finances and particularly for locking in as much as possible of State borrowings during the period of exceptionally low international interest rates. READ MORE It also has €30 billion in cash reserves to call on, enough to act as a safeguard if trouble hits. This cash could help the State through a temporary period of difficulties. However, as we saw after 2008, structural changes in the public finances –in particular permanent alterations in tax trends – still require money to be found elsewhere. Here, the obvious risk for Ireland is a fall-off in corporate tax revenues. The strength of the public finances and the cash pile in the NTMA coffers give Ireland time to reduce its exposure to this risk. But it does not remove it.
Irish Examiner
14-07-2025
- Business
- Irish Examiner
NTMA benchmark bond issuance totalled €6bn in 2024
The National Treasury Management Agency's (NTMA) benchmark bond issuance in 2024 totalled €6bn, with the average annual bond issuance from 2022 to 2024 being less than €7bn. Publishing its mid-year review and annual report, the agency said the €7bn compares with an annual average of almost €20bn for the period 2019 to 2021. The bond issuance in 2024 was at a weighted average yield of 2.7% and a weighted average maturity of 11.6 years. Despite higher marginal funding costs in recent years, Ireland's debt interest bill has remained stable, standing at €3.2bn in 2024, almost 60% below its 2013 peak. Limited issuance in recent years, coupled with the fact that almost all of Ireland's existing debt is at fixed interest rates, means the interest bill is likely to remain relatively stable in the near term, the NTMA said. The agency reported a total of €30bn in cash and liquid assets at its half-year point, which reduces the requirement for borrowing in the coming years. So far in 2025, the NTMA has issued €5.25bn in benchmark bonds, including a new 30-year bond maturing in 2055. The weighted average yield of issuance was 3.07% with a weighted average maturity of 21.9 years. ISIF The Irish Strategic Investment Fund (ISIF), which is managed by the NTMA, recently marked 10 years since its establishment, having generated €2.9bn of accumulated returns since inception to end-2024, an annualised return of 3.4% per annum. The fund made 35 investments totalling over €1.6bn in 2024, bringing total ISIF commitments to €8.8bn across 248 investments and €12.6bn of co-investment commitments since inception, a co-investment multiple of 1.4 times. So far in 2025, ISIF has closed a further €800m in investments across its key themes of climate, scaling indigenous businesses, housing and enabling investments and food and agriculture. Meanwhile, the Future Ireland Fund and the Infrastructure, Climate and Nature Fund, which was established in July 2024, had combined assets of approximately €10.5bn at year-end, following initial contributions from the National Surplus. Following the recent receipt of further Exchequer contributions, the combined assets of the Funds are now approximately €13.5bn, and are expected to be over €16bn by end-2025. 'Ireland is well-positioned against the backdrop of uncertain markets," said chief executive of the NTMA, Frank O'Connor. "There is a strong market awareness of the buffers we have in place through our Funding and Debt Management strategy – the strength of our public finances, coupled with the long weighted average maturity of our debt, means we expect to have relatively low borrowing requirements in the short to medium term. "We are also benefiting from locking in the low interest rates in previous years, with the debt interest cost in 2024 of €3.2bn being almost 60% less than its peak over a decade ago. The interest bill is likely to remain relatively stable over the next few years." Phishing attack Mr O'Connor also said the state investment agency will review its security protocols after losing €5m in a phishing attack. The scam was discovered last week after staff at the €17bn Ireland Strategic Investment Fund (ISIF), a sovereign development fund that the agency also runs, expressed concern about a payment made to what they thought was an investee company. Instead, it was found that they had received a fraudulent payment request from a third party designed to look like a legitimate request from the existing investee company at the time of an expected drawdown of funds, Mr O'Connor said at a conference on Monday.
RTÉ News
14-07-2025
- Business
- RTÉ News
Donohoe backs NTMA management after €5m fraud incident
The Minister for Finance Paschal Donohoe has backed the management of the National Treasury Management Agency after it was subject to a €5m fraud. The NTMA's Ireland Strategic Investment Fund made the payment in what is termed a cash call to a third party which pretended to be an investee company which had previously received a legitimate payment. The NTMA is the body responsible for Ireland's national debt. At a press conference today, Minister Donohoe said the fraudulent payment "was regrettable and extremely rare." He added he had seen at first hand how the NTMA protects the taxpayers' money and "every effort" would be made to investigate the issue. It is understood that the payment was made to a third party which pretended to be a fund which had previously received a payment from the NTMA. The fraudulent payment was made last week and staff at the organisation reported the issue to Gardaí when they became aware of the matter. The CEO of the NTMA, Frank O'Connor, said the "immediate focus was on recovery" of the money. "We will have a hard look at our own systems," he said. He added that there was no suggestion of an IT breach on the side of the NTMA or any threat to the IT systems of the NTMA. Meanwhile, the NTMA said today it had sold off Israeli, Egyptian and Jordanian sovereign bonds due to "geopolitical uncertainty". The organisation previously had a holding of €2.6m in Israeli bonds in 2023. The NTMA issued its annual report today and said Ireland borrowed money at an average interest rate of 2.7% last year. It said despite higher marginal funding costs over recent years, the country's annual interest bill remained stable at €3.2 billion last year, almost 60% below its peak in 2013 after the financial crisis. The agency said the interest bill is likely to remain stable in the near term as almost all of Ireland's existing debt is at fixed rates. The net debt, when cash on deposit and liquid assets, are is taken into account, now stands at €157 billion. The NTMA said its funding strategy meant that it had over €30 billion in cash and liquid assets which reduces its requirement for borrowing in the coming years. The NTMA's Ireland Strategic Investment Fund made 35 investments last year worth €1.6 billion. The Minister for Finance said the NTMA continued to build up cash balances at a time when Ireland could face volatility caused by US tariffs.
Irish Independent
27-06-2025
- Business
- Irish Independent
‘They are not a suitable long-term investment' – expert questions wisdom of buying Prize Bonds as sales drop sharply
A total of €351m was spent on new Prize Bonds last year, according to the Prize Bond Company. This was a fall on sales of €489m in 2023, and was well down on the figure from 2022, when €615m in new Prize Bonds were sold. Consumer advocate Brendan Burgess said the bonds are not a suitable long-term investment. The value of the Prize Bonds fund at the end of last year was €4.46bn, also down on previous years. There were 386,307 Prize Bonds sold last year, a fall of 27pc on the previous year. The National Treasury Management Agency (NTMA), which manages the Prize Bond draws, says on its website the prize fund amounts to 1pc of the fund. Mr Burgess, founder of the website, said this was a poor return. Britain's equivalent, called Premium Bonds, have a prize fund of 3.5pc. However, the central bank there has a higher deposit rate than the European Central Bank. Some finance experts claim that buying Prize Bonds means forgoing interest and essentially buying a raffle ticket. ADVERTISEMENT The Prize Bond Company, which sells and markets the bonds on behalf of the NTMA, said the monetary value of prizes was €45.6m last year, an increase of 89pc in the financial year. Mr Burgess said this means the return was a tax-free 1pc. He said this was better than can be earned on a current account. 'But with inflation well in excess of 1pc, these people lost money in real terms,' he said. He said he was he was amazed at the number of people who die with large sums of money in Prize Bonds for years. 'They are not a suitable long-term investment. For a long-term investment, people should be in a diversified portfolio of shares,' Mr Burgess said. Four years ago, the Prize Bond Company controversially scrapped the €1m top prize. It was replaced with a monthly jackpot of €500,000, and a string of smaller prizes. There were 475,102 prizes awarded last year, with a total value of €45.6m, the Prize Bond Company said. 'Currently, over 8,500 prizes are awarded weekly, with a weekly jackpot prize valued at €50,000, and in addition a jackpot prize of €500,000 in the last weekly draw each month,' it said. Chairperson of the Prize Bond Company, Debbie Byrne, said there has been a big shift by consumers to buying Prize Bonds online. A quarter of all Prize Bond sales last year were generated online, compared with 21pc in 2023. Ms Byrne said the €351m in sales last year reflected continued customer confidence in Prize Bonds 'as a unique retail savings product'. She said the number of prizes issued increased by 53pc last year, along with an increase of 89pc to the value of these prizes. 'The opportunity to win prizes remains a defining feature of the Prize Bonds product and part of its enduring popularity,' she said.
Irish Independent
21-05-2025
- Business
- Irish Independent
‘I am not a political person, I did not seek this role' says Nama boss Brendan McDonagh amid housing tsar controversy
Mr McDonagh, who is paid €430,000 as CEO of the National Asset Management Agency (Nama), said the public was entitled to ask questions, but there had been no discussion with the National Treasury Management Agency (NTMA) over what his salary would be. Mr McDonald told the Oireachtas Committee on Finance that the first time he met with the Minister for Housing to discuss the position of chief executive for the new Housing Activation Office was in April. "I'm not prepared to discuss the details of my contract. My salary is publicly disclosed," Mr McDonagh said, adding that he had waived an annual bonus every year since his appointment. He refused to answer questions about his "personal" affairs, such as reports that he is renting out a house in Cabra for €10,000 a week (over €40,000 a month). Mr McDonagh insisted, however, that he was making "all relevant disclosures" as required. "There does come a point when matters are private, and I reserve my position," he said. He said he fully accepted he was "very well paid," but argued he had returned "value for money" through a surplus of billions returned to the taxpayer. He said he was not a public representative, but had decided not to go forward because "why would I be kicked around like a political football." He added: "I did not seek this role." He spoke about the approach to him by Minister for Housing James Browne about the job of Housing Tsar, that was first mediated by the Secretary General of the Department of Housing. "The first time I met the Secretary General was on 10 April, and we had a general discussion," he said. ADVERTISEMENT Learn more "He subsequently called to invite me to meet Minister Browne on the 16 of April, the Wednesday before Holy Thursday of the Easter weekend. "Minister Brown outlined that's what he wanted the CEO (of the new Housing Activiation Office) to do. And I should add, this was not a role I sought or ever canvassed for. I want to be absolutely clear about that. "But Mr Browne said: 'Your name has been mentioned in many circles as being somebody who might have appropriate skills to help. Would you be prepared to let me propose your name to the Cabinet subcommittee and the Government?' "After talking with him, I agreed; and that was my only discussion about the role, which was with, Minister Browne. "I had no other contact with any other members of the political system. On the first of May, given there was lots of public controversy about me and the role - I am not a political person, I'm apolitical - I really felt I didn't want to be part of that. "I'm a professional. I believe I'm a public servant, and I didn't want the story to be all about me. So I advised the minister on 1 May that I really wasn't interested. "Because, to be honest, everybody who knows me, I'm very straightforward. I made the decision." "We are all affected by the housing crisis. We all have kids. And I thought I had something to offer." The nomination as Housing Tsar was torpedoed when Tanaiste and Fine Gael leader Simon Harris said he would prefer the name had not emerged in public before Government discussion of it. He was answering Ged Nash of the Labour Party, who said there was disagreement at the heart of Government about it. Mr McDonagh said his name had been in the media for a week, and nobody had contacted him, and he was "really annoyed about it." He said he didn't know who to ring about it. He added: "I'm a GAA man, so you're playing the man and not the ball. It wasn't to be - so be it, we move on. That's life." Mr McDonagh was asked if Mr Browne had apologised. He said he did not like to discuss private conversations. But he said he, the Minister had said he was sorry that he (McDonagh) felt he had to pull out, and that it had "not worked out." Mr McDonagh was asked by Sinn Féin spokesman Pearse Doherty, if, on April 16, when he met Minister Browne, he had discussed retention of his salary. He replied: "No, my salary was never discussed." Mr Doherty then queried how Micheál Martin could stand up in the Dail and say the the appointment would not cost the taxpayer any more than Mr McDonagh was earning at present. "Was it ever understood that you were retaining your €430,000 salary if you accepted that position?" Mr Doherty asked. He answered: "There was no discussion about it. I'm being completely frank with you here. "My parent body is the NTMA. There's lots of speculation about my salary in the paper, but I can honestly say that there was no discussion about my salary with Minister Brown. "I will be open and frank with you. There was a lot of speculation in newspapers for a number of weeks, but nobody had discussed anything with me." He added: "I hate the phrase Housing Tsar. I never used it." Mr McDonagh said Felipe could solve the country's housing problems. The Spanish equivalent of Philip, the acronym Felipe was explained by Mr McDonagh as a check-list towards breaking the housing logjam. "I developed an acronym called Felipe, and I believe if these issues were resolved, they would go a long way towards helping to unlock the housing problems of the country," Mr McDonagh told TDs and Senators. He explained the individual Felipe letters in turn. "F stands for finance development. Finance is crucial. It has to be available for developers to build. 'E is expertise. Expertise is what you need in your trades. You need your carpenters, plumbers, and electricians. We don't have enough of them in the country. We are never going to solve the housing crisis by not having those skill sets. We all know people who are plumbers and electricians, and like myself, they're getting older, and eventually there's nobody coming behind them. And that's not good." "L is land. Okay, you need land in terms of housing." "I is infrastructure, and infrastructure is crucially important. Because you can have all the land zoned in a country, but if it doesn't have infrastructure, nothing will happen. "P is planning and zoning. We've had huge delays in the planning system. We've got sites ourselves (in Nama) that have been in planning for over two years and still havn't come out the other side. Also, in my experience, even if you get planning, the likelihood of it being judicially appealed to An Bord Pleanála and then judicial reviewed is very high. It costs a huge amount of money." "The final E in Felipe to me is engineering. This includes modern methods of construction. The productivity in the construction sector is one of the lowest across all industries." Mr McDonagh concluded the point: "To me, if you solve those six issues, you have gone a long way to towards trying to help resolve the situation."
