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Ballobh Kritayanavaj Senior Vice President GH Bank – Thailand

“ Housing Finance Market in Thailand”

Workshop on Housing Finance

Asia Pacific Union for Housing Finance(APUHF)

Ulaanbaatar, Mongolia26-29 June 2011

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Residential Mortgages in Thai EconomyResidential Mortgages in Thai Economy

Items 2004 2005 2006 2007 2008 2009 2010

Residential Mortgage

Outstanding (RM)1,055,084 1,220,394 1,351,182 1,443,435 1,566,440 1,715,584 1,873,784

All Types of

Loans(AL)6,891,809 7,477,571 7,756,122 8,137,489

9,6902,23

10,390,417 11,802,544

GDP at current price 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 17.2 16.9 17.3 19.0 18.5

Source : Bank of Thailand Unit : Million Baht

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GDP VS New Home Loan Growth Rates in Thailand

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

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Newly - launched Housing Units - Bangkok and Vicinity

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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 Share of Home Market Share of Home Loans OutstandingLoans Outstanding

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GH Bank GH Bank

Established in 1953,

under the Ministry

of Finance (MOF)State Enterprise,

solely-owned by the

governmentSpecialised Housing

Finance Institution

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GH Bank GH Bank PurposesPurposes

Assists Thai people to have their own home

Provides mortgage loans to general public,

emphasises on low and middle income groups

Operates in the banking system on commercial basis

Competes in the free financial market both in funding

and lending

No direct-funding or subsidy from the government

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GH Bank OrganizationGH 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

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GH Bank PROFIT

Source : GH Bank

ITEM 2006 2007 2008 2009 2010

Profit(mill.THB)

2 ,328

36, 91

33,06

50,33

63,53

Profit/head(mill.THB)

1066

16.61

14

69

2.287 2.611

Bonus (salary-month)

45.5

65. 47

5

60. 65.

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GH Bank Financial Ratio

Source : GH Bank

Items 2008 2009 20102011

(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

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Expansion of GH Bank AssetsAssets

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GH Bank’s GH Bank’s Deposit OutstandingDeposit Outstanding

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GH Bank’s New Home LoansGH Bank’s New Home Loans

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GH Bank’s Home Loans Outstanding

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Net Interest Margin GH Bank Net Interest Margin GH Bank

VS Commercial BanksVS Commercial Banks

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Mortgage Market Leader in Thailand 34 - 40% market share (highest)

Govt’ instrument in real estate market revival and economic

growth stimulation - Government assisted- mortgage programme for first-time homebuyers- etc.

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) • Home-buying information center www.ghbhomecenter.com • Real estate professional associations (>16)

GH Bank’s role

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GH Bank Home Mortgage Lending

• Maximum loan amounts : no limit (average loan size Bt700,000)

• 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%

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GH Bank Home Mortgage Lending

• Valuation fees : Bt1,700 – 2,100

• Origination Fees : 0.01% if exceed Bt500,000

• 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)

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Deposit Rates GH BANK VS Commercial Banks

Type of DepositGH BANK

(%)Commercial Banks

(%) Savings Account 0.75 0.75

Special Savings Account 2.00 1.00 – 2.50

Time Deposit Account    

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

Sources : GH Bank and Bank of Thailand (BOT) as of 20 June 2011

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GH Bank GH Bank Mortgage Mortgage Interest RatesInterest Rates

Option Type of Rate RateRemainder of

Loan Term

MRR - 0.50 = 6.375%

1 Special Floating Rate

1st - 2th Year MRR - 2.00 % = 4.875 %

3th Year MRR - 1.00 % = 5.875 %

4th Year MRR - 0.50 % = 6.375 %

MRR = 6.875 %

2 Fixed Loan Rate

3-Year 6.50 %

5-Year 7.00 %

Note : Effective Date June 20, 2011

: MRR is GHB Floating Rates

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GH Bank GH Bank Mortgage Mortgage Interest RatesInterest Rates

TypeRate Remainder of

Loan Term

LTV

Ordinary Customer 2 options MRR = 6.875 %

70% - 85%

Baan Eua Arthorn

1st Year = 3.00 %

2st - 3th Year = MRR – 1.50 % = 5.25%

4th Year = MRR – 1.00 % = 5.75 %

MRR – 1.00 % = 5.75 % 100%

Social Security member

Fixed Rate

2-Year = 4.50% MRR – 1.00 % = 5.75 % 80% - 90%

Note : Effective Date June 20, 2011

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2 years 0% First Home Mortgage Programme

Total Programme Loan amount: Bt25 billion

For first- time homeowners : no homeownership

Loan limit : not more than Bt3 million

Loan period : not more than 30 Years

Loan Interest rates:

1st – 2nd year equal 0%/year

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

retail customers = MRR

6th year onward, welfare customers = MRR – 1.00%/year,

retail customers = MRR – 0.50%/year

Fees - transfer fee (1% from 2%) no mortgage registration fee (1%)

Programme period: May 9 – December 30,2011 (14 June fully booked)(14 June fully booked)

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Refinance-In Programme

Total Programme Loan amount: Bt5 billion

Loan interest rates (privilege) :

- 1st year = MRR - 5% - 2nd year = MRR - 2 %

- From 3rd year onwards = MRR – 1 %

For welfare customers only

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