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Government Housing Bank, Thailand

Growth with Stability in Affordable Housing Markets:

“Primary Mortgage MarketsGrowth & Prospects”

Ballobh KritayanavajSenior Vice PresidentG H Bank – Thailand

Jan. 30, 2011

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Housing Completion in Bangkok Housing Completion in Bangkok and Metropolitan Regionand Metropolitan Region

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Housing completions in Bangkok Housing completions in Bangkok and Metropolitan Region by typesand Metropolitan Region by types

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Newly - launched Housing Units - Bangkok and Vicinity

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New Home Loans in ThailandNew Home Loans in Thailand

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Market Share of New Home LoansMarket Share of New Home Loans

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Home Loans Outstanding in ThailandHome Loans Outstanding in Thailand

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Market ShareMarket Shareof Home Loans Outstandingof Home Loans Outstanding

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 Branches include

Headoffice

Asset(mil.THB)

(Oct)MOR MRR

Deposit1 Year

GH Bank 156 708,065 7.875% 7.25% 3.25%

Commercial Banks (Averaged)

6,151 12,981,188* 8.0406% 8.6281%2.25 - 3.60%

Sources : GH Bank and Bank of Thailand (BOT) as of Dec 2011

* Commercial Banks registered in the country

GH Bank VS Commercial Banks

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 Maximum

Interest Rates (normal case)

Maximum Interest Rate

(default)Valuation Fee Refinance Fee

Debt collection

fee

Management Fee

GH Bank 19% 13.5% 1,700 - 2,800

year 1 = 3% year 2 =

2.5% year 3 = 2%

1,000 Baht/Time

0.1% ofloan amount

Commercial Banks (Averaged)

12.00 - 15.195%

15 - 18% 2,500 - 5,350 3% of

loan agreement No charge0.25% of

loan amount

Sources : GH Bank and Bank of Thailand (BOT) as of Dec 2011

GH Bank VS Commercial Banks

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Mortgage rates strategy

1. Interest rate 0% (3 – 36 months)

- GH Bank 0% for 36 months, year 4 – 7 = MRR, year 8 onwards MRR -0.5

- Commercial banks (6) 0% for 3 -10 months, year 1-3 = MRR minus, year 8 onwards MRR

2. Fixed short term rate (1-3 years)

- Commercial banks (4) 1 year = 2.5% - 5.25%

- Commercial banks (4) 2 year = 3.75% - 5.50% after that MLR -0.25% to 1.75%

- Commercial banks (3) 3 year = 3.45% - 6.25%

3. Special floating rate (1-3 years) - GH Bank year 1-2 = MRR-2%, year 3 = MRR-1% after that MRR-0.5%

- Commercial banks (2) 1 year = MLR – 1.75% and MLR - 2.6% - Commercial banks (5) 2 years = MLR - 1.00% to 4.00%

- Commercial banks (7) 3 years = MLR – 0.40% to 4%

4. Hybrid rate - Commercial banks (5) fixed year 1 = 1.25% - 2.75%

float year 2 = MLR – 1.00 to 2.00

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Mortgage Market Leader in Thailand 34 - 40% market share

Gov. instrument in real estate market revival and economic

growth stimulation - Government assisted- mortgage programme for first-time homebuyers - Bann Eur-Arthorn (NHA), Bann Mankong CODI

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)

Housing Knowledge and Education Center • GH Bank Housing Journal - Thai (1995) • Asia Pacific Housing Journal - English (2007) • Homebuyer information center www.ghbhomecenter.com • Real estate professional associations (>16)

GH Bank Leading Roles

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Deposit rate 1.00 – 4.58%

Reference rate MRR = 7.25%

Mortgage rate MRR - ? % (up to selected program)

Loan Conditions

  LTV Interest rate Term

Ordinary Customers 70-80% MRR- ? % 30 yr.

Welfare Customers 90-100% Ordinary rate - 1.00% 30 yr.

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GH Bank Home Mortgage Lending

• Maximum loan amounts : no limit (average loan size Bt500,000)

• Loan - to - value ratios : 70 – 100%

• Loan term

up to 20-30 years (Age of borrowers plus loan term must not exceed 70 years)

• Mortgage Rates

1. Floating rate = MRR

2. Special floating rates = MRR minus

3. Hybrid mortgage (fixed + floating rate)

• Mortgage interest rate ceilings GH Bank 19% / Commercial Banks 11.25% - 18%

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GH Bank Home Mortgage Lending

• Valuation fees : Bt1,700 – 2,800

• Origination Fees : 0.01% if exceed Bt500,000

• Loan analysis and approval : Credit scoring

• Property transfers: 2% mortgage registration: 1%

• Monthly payment calculation : MRR+1%

• Loan repayment channels : Banks + pay points e.g. 7-11, Post office

JayMart,Pay Point, Tesco Lotus, Advanced Info Service Plc

• Mortgage amortization : declining principal balance

• Prepayment penalties : First year at 3%, year 2-3 at 2.5%

• Late charges : 60-day-past-due charges 13.5%

• Mortgage related insurance : fire insurance (compulsory)

Mortgage life insurance (voluntary)

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First-Time Home Buyer Mortgage Programme I

Total Programme Loan amount : Bt25 billion

First- time homebuyers : no homeownership record

Purpose : Buying New home, resale home or home construction

Loan limit : not more than Bt3 million

Loan period : not more than 30 Years

Loan interest rates - 1st – 2nd year = 0%

- 3rd – 5th year, welfare customers = MRR - 0.5%

ordinary customers = MRR (current = 7.25%)

- 6th year, welfare customers = MRR – 1.00%

ordinary customers = MRR – 0.50%

Fees : mortgage registration fee (1% Exempt), transaction fee (1% from 2%)

Program period : 9 May – 30 Dec. 2011

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Total Programme Loan amount : Bt20 Billion

First- time homebuyers - no homeownership record

For : Buying New home, resale home or home construction

Loan limit : not more than Bt1 million

Loan period : not more than 30 Years

Loan interest rates

1st – 3rd year = 0%

4th Onwards = MRR-0.5% (Current MRR = 7.25%)

Refinance : not allowed before 7 years

Program period : 11 Oct. 2011 – 30 Sept. 2012

First-Time Home Buyer Mortgage Programme II

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Special Five-Point Flood Loan-- Mitigation Programme

1. Waiving monthly loan payments for six monthly program and reducing interest payments to zero per cent during the same period,for home owner with damaged homes. For those with several damaged homes,an additional six months of payments will be waived.

2. Borrowers disabled or lost lives during floods will have interest payments reduced to 0.01 per cent per year for entire loan terms.

3. If borrowers’ home became uninhabitable because of flooding,their loans would be reduced to land-values only.

4. Any new or existing borrowers that had their homes damaged by floods could apply for special home-repair loans (not exceeding Bt 1 million) at two per cent interest for five years.

5. The Bank will provide loans not exceeding Bt 100,000 per person (no collateral needed) to renovate damaged home at four per cent fixed interest rate for five years.

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Mortgage Market : Growth & Prospective • Government housing policy

• MOF + BOT Regulations

• Economic growth

• Employment and income growth

• Bank’s strategies and competitive advantages

• Financial market

• Housing market situation (RE cycles)

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Housing Ladder

Extremely High (detached houses)Upper 20 Million THB 167,300Extremely High (detached houses)

Upper 20 Million THB 167,300

Very High (detached houses)10 Million THB 83,700

Very High (detached houses)10 Million THB 83,700

High (detached houses / condominiums)5 Million THB 41,900

High (detached houses / condominiums)5 Million THB 41,900

Medium High (condominium / townhouses / detached houses)3 Million THB 25,100

Medium High (condominium / townhouses / detached houses)3 Million THB 25,100

Medium (condominiums / town Houses / detached houses)2 Million THB 14,800

Medium (condominiums / town Houses / detached houses)2 Million THB 14,800

Medium Low (condominiums / cheap townhouses / duplexes / one-storey detached houses)

1 Million THB 8,400

Medium Low (condominiums / cheap townhouses / duplexes / one-storey detached houses)

1 Million THB 8,400Low (duplexes / small condominiums)

500,000 THB 4,200 Low (duplexes / small condominiums)

500,000 THB 4,200

Very Low (squatters / slums / rental housing / apartments)

Very Low (squatters / slums / rental housing / apartments)

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33

44

55

66

77

88

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Remark : Monthly payment calculation interest rate 7% ,Term 20 years, Loan to Value ratio 85%

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Growth with Stability in Affordable Housing Market (THAILAND)Growth with Stability in Affordable Housing Market (THAILAND)

Ministry of FinanceMinistry of FinanceMinistry of Social Development & Human Security

Ministry of Social Development & Human SecurityMinistriesMinistries Ministry of InteriorMinistry of Interior

Govt. AgenciesGovt. AgenciesBank of ThailandBank of ThailandLand DepartmentDept. Public Works andTown & Country Planning

Land DepartmentDept. Public Works andTown & Country Planning

Special Financial Institutions

Special Financial Institutions

National Housing Authority (NHA)Community Organizations Development Institute (CODI)

National Housing Authority (NHA)Community Organizations Development Institute (CODI)(Regulators,

Financiers, Developers, Land registrations)

Private SectorPrivate Sector

Professional AssociationsProfessional Associations

Training & Education

Training & Education

InformationInformation

DevelopersDevelopers ValuersValuers RE BrokersRE Brokers Community/ Property Managers

Community/ Property Managers

Com. Banks Financial CompanyOther Financial Institutions

GH BankGSB SMC

UniversitiesUniversitiesTraining CentersTraining Centers

REICREIC GH BankGH Bank Com. BanksCom. Banks OthersOthers

www.reic.or.th

www.ghbhomecenter.comJournals (Thai + Eng)

Websites

WebsitesMagazines (e.g. Home Buyer Guide etc.)

Ballobh K. 20 Jan 2012

CU - TURU - ABAC

Thai Condominium Assoc.Housing Business Assoc.Thai Real Estate Assoc.

Thai Valuers Assoc.Valuers Assoc. of Thailand

Thai RE Brokers Assoc.

Property Mangt. Assoc.

AREA- TRES-Associations

Housing Finance Assoc.

Financiers

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