Workshop on Housing Finance Housing Finance Market in

Workshop on Housing Finance “ Housing Finance Market in Thailand” Asia Pacific Union for Housing Finance (APUHF) Ulaanbaatar, Mongolia 26 -29 June 2011 Ballobh Kritayanavaj Senior Vice President GH Bank – Thailand 1

Residential Mortgages in Thai Economy Items 2005 2006 2007 2008 2009 2010 1, 055084, 1, 220, 394 1, 351, 182 1, 443, 435 1, 566, 440 1, 715, 584 1, 873, 784 6, 891, 809 7, 477, 571 7, 756, 122 8, 137, 489 9, 690223, 10, 390, 417 11, 802, 544 6, 489, 476 7, 092, 893 7, 844, 939 8, 525, 197 9, 080, 466 9, 041, 551 10, 102, 986 RM : AL (%) 13. 9 16. 3 17. 4 17. 7 16. 2 16. 5 15. 9 RM : GDP (%) 16. 3 17. 2 16. 9 17. 3 19. 0 18. 5 Residential Mortgage 2004 Outstanding (RM) All Types of Loans(AL) GDP at current price Source : Bank of Thailand Unit : Million Baht 2

GDP VS New Home Loan Growth Rates in Thailand 3

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Housing Completion in Bangkok and Metropolitan Region 5

Newly - launched Housing Units Bangkok and Vicinity 6

Newly - launched Housing Units Bangkok and Vicinity 7

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New Home Loans in Thailand 9

Market Share of New Home Loans 10

Home Loans Outstanding in Thailand 11

Market Share of Home Loans Outstanding 12

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GH Bank 4 Established in 1953, under the Ministry of Finance (MOF) 4 State Enterprise, solely-owned by the government 4 Specialised Housing Finance Institution 14

GH Bank Purposes 4 Assists Thai people to have their own home 4 Provides mortgage loans to general public, emphasises on low and middle income groups 4 Operates in the banking system on commercial basis 4 Competes in the free financial market both in funding and lending 4 No direct-funding or subsidy from the government 15

GH Bank Organization Assets : 678, 904 million baht (2010) (Rank no. 7) Home loans : 659, 092 million baht (2010) Deposits : 546, 277 million baht (2010) Profit : 6, 353 million baht (2010) Staffs : 2, 457 )as of April, 2011( Branches : 78 branches )BMR=32, Provincial = 46( 18 mini- branches 16 mobile credit unit 26 One Stop Services 15 Off-site banking counters 16

GH Bank PROFIT ITEM 2006 2007 2008 2009 2010 Profit 328, 2 3, 691 3, 306 5, 033 6, 353 Profit/hea 1. 066 d 1. 661 1. 469 2. 287 2. 611 6. 5 4. 75 (mill. THB) Bonus 4. 55 6. 0 6. 5 (salary-month) Source : GH Bank 17

GH Bank Financial Ratio Items 2008 2009 2010 2011 (April) ROA (%) 0. 51 0. 74 0. 93 1. 34 ROE (%( 11. 61 15. 65 17. 19 22. 97 Interest Rate Spread (%) 1. 63 2. 39 2. 34 2. 5 Liquidity Ratio (%) 12 13. 76 7. 5 6. 05 Provision NPL 44. 35 54. 35 65. 82 69. 05 Source : GH Bank 18

Expansion of GH Bank Assets 19

GH Bank’s Deposit Outstanding 20

GH Bank’s New Home Loans 21

GH Bank’s Home Loans Outstanding 22

Net Interest Margin GH Bank VS Commercial Banks 23

GH Bank’s role Ø Mortgage Market Leader in Thailand 34 - 40% market share (highest) Ø Govt’ instrument in real estate market revival and economic growth stimulation - Government assisted- mortgage programme for first-time homebuyers - etc. Ø Housing Finance Infrastructure • • National Credit Bureau (established in 2004, currently with 75 institutional members and 30 million accounts) Real Estate Information Center, www. reic. or. th (2004) Ø Housing Knowledge and Education Center • • GH Bank Housing Journal - Thai (1995) Asia Pacific Housing Journal - English (2007) Home-buying information center www. ghbhomecenter. com Real estate professional associations (>16) 24

GH Bank Home Mortgage Lending • • • Maximum loan amounts : no limit (average loan size Bt 700, 000) Loan - to - value ratios : 70 – 100% Loan term or repayment period 20 -30 years (Borrower’s age and term loan must not exceed 70 years) • Mortgage Rates 1. Floating rate 2. Fixed rate 3. Mixed-rate loan or hybrid mortgage 4. Special floating rates • Mortgage interest rate ceilings GH Bank 19% / Commercial Bank 11. 25% - 18% 25

GH Bank Home Mortgage Lending • Valuation fees : Bt 1, 700 – 2, 100 • • • Origination Fees : 0. 01% if exceed Bt 500, 000 Loan analysis and approval : Credit scoring Property transfers 2% mortgage registration 1% Monthly installment payments : MRR+1% Loan repayment channels : Banks + other pay points e. g. 7 -11 Mortgage amortization : declining principal balance Prepayment penalties : First year 3%, year 2 -3 for 2. 5% Late charges : 60 -day-past-due charges 13. 5% Mortgage related insurance : fire insurance (compulsory) mortgage life insurance (voluntary) 26

Deposit Rates GH BANK VS Commercial Banks Type of Deposit GH BANK (%) Commercial Banks (%) Savings Account 0. 75 Special Savings Account 2. 00 1. 00 – 2. 50 3 - Months 2. 25 1. 50 - 2. 50 6 - Months 2. 35 1. 95 - 2. 85 12 - Months 2. 60 2. 25 – 2. 75 24 - Months 3. 25 2. 75 – 3. 30 36 - Months 3. 60 2. 00 – 3. 25 60 - Months 3. 65 2. 50 – 3. 50 Time Deposit Account Sources : GH Bank and Bank of Thailand (BOT) as of 20 June 2011 27

GH Bank Mortgage Interest Rates Option Type of Rate 1 Special Floating Rate 2 Rate 1 st - 2 th Year MRR - 2. 00 % = 4. 875 % 3 th Year MRR - 1. 00 % = 5. 875 % 4 th Year MRR - 0. 50 % = 6. 375 % Remainder of Loan Term MRR - 0. 50 = 6. 375% Fixed Loan Rate MRR = 6. 875 % 3 -Year 6. 50 % 5 -Year 7. 00 % Note : Effective Date June 20, 2011 : MRR is GHB Floating Rates 28

GH Bank Mortgage Interest Rates Rate Type Ordinary Customer Remainder of LTV Loan Term 2 options MRR = 6. 875 % 70% - 85% 1 st Year = 3. 00 % Baan Eua Arthorn 2 st - 3 th Year = MRR – 1. 50 % = 5. 25% MRR – 1. 00 % = 5. 75 % 100% MRR – 1. 00 % = 5. 75 % 80% - 90% 4 th Year = MRR – 1. 00 % = 5. 75 % Social Security member Fixed Rate 2 -Year = 4. 50% Note : Effective Date June 20, 2011 29

2 years 0% First Home Mortgage Programme Ø Total Programme Loan amount: Bt 25 billion Ø For first- time homeowners : no homeownership Ø Loan limit : not more than Bt 3 million Ø Loan period : not more than 30 Years Ø Loan Interest rates: 1 st – 2 nd year equal 0%/year 3 rd – 5 th year, welfare customers = MRR- 0. 5%/year , retail customers 6 th year onward, welfare customers = MRR – 1. 00%/year, retail customers Ø Fees - = MRR – 0. 50%/year transfer fee (1% from 2%) no mortgage registration fee (1%) Ø Programme period: May 9 – December 30, 2011 (14 June fully booked)30

Refinance-In Programme Ø Total Programme Loan amount: Bt 5 billion Ø Loan interest rates (privilege) : - 1 st year = MRR - 5% - 2 nd year = MRR - 2 % - From 3 rd year onwards = MRR – 1 % Ø For welfare customers only 31

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