“ The Role of Specialized Housing Lenders ” March 15, 2006 The Government Housing Bank of...
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“The Role of Specialized Housing Lenders” March 15, 2006 The Government Housing Bank of Thailand
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Transcript of “ The Role of Specialized Housing Lenders ” March 15, 2006 The Government Housing Bank of...
“The Role of Specialized Housing Lenders”
March 15, 2006
The Government Housing Bankof Thailand
Presented to
The World Bank Group “Housing Finance in Emerging Markets”
Washington, DC, USA
by Khan Prachuabmoh, President
Government Housing Bank of Thailand
The Government Housing BankEstablished 1953
Special-purpose financial institution under the
Ministry of Finance
Major emphasis - Providing mortgage loans to
individual buyers
Commercially-based operation - competes as one bank in the Thai banking system
www.ghb.co.th
The Government Housing Bank
Number of Branches – 122
Employees – 2,150
Existing Mortgage Loan Borrowers – 1.038 million accounts
39 per cent of all residential mortgages in Thailand as of 12/31/05
48 per cent of all new residential loan originations in Thailand 2005
Total Assets (12/31/05) Bt531 billion ($US13.3 billion)
Net Profit (12/31/05) Bt4.37 billion ($US109 million)
Return on Equity – 17.32 per cent
Operational Efficiency – Assets per employee Bt246 million
($US6.6 million) (No 1 among all Thai Banks)
One of Thailand’s Best Performing Banks
The Government Housing Bank
Best Performance
Best Board of Directors
Best Management
One of Thailand’s Best Performing Banks
Best Performing State Enterprise 2005
Winner of Awards in all Categories
The Government Housing Bank
Key Operating Elements
Large client base – Excellent payment records and substantial real estate - based equity positions
Close relationship with borrowers – Large percentage pay
via automatic monthly withdrawals
Constantly developing new programs - leveraging more than 52 years of relationships with customers
The Government Housing Bank
Big Housing Challenges
Building enough appropriate and affordable housing for low to middle income people
Developing appropriate legal infrastructure and mechanisms for converting slums and squatters rights into legal rights that satisfy all stakeholders
Further developing secondary housing market
The Government Housing Bank
Major Housing ChallengesDeveloping Secondary Home Market
Major policy initiative of new government
Create more entry points to housing ladder
Facilitates unlocking of real estate wealth
The Government Housing Bank
The Need for Innovative Government Housing Policies
Rapid urbanization - past three decades
20 million urban residents - about 30 per cent of total population
Upper-middle and higher income well-serviced by private sector
Need to address middle and lower income housing issues
The Government Housing Bank
Innovative Housing Finance Programs& other Government Policy Initiatives
Hire Purchase Programs
Allows low-income individuals with no prior credit records to purchase homes
Initially occupy homes with hire-purchase contracts
Payments for three-to-five years before title transferred
After proving credit – become owners – obtain mortgages
The Government Housing Bank
Innovative Housing Finance Programs& other Government Policy Initiatives
Baan Mankong - National Slum Upgrading Program
Baan Eur-Artorn - Low Cost Housing Program
Asset Capitalization Programs
Government Housing Bank -Government Pension Fund Loan Schemes
The Government Housing Bank
Must More Than Just A Lending Institution
Credit Bureau
Real Estate Information Center, www.resalehomethai.com
Developing Real Estate Brokers and Sales Agents’ Licensing Laws – Education
Second-hand resale home market
Mortgage Insurance (2006)
Securitization (2006)
The Government Housing Bank
Creating Infrastructure That Sustains Long-tem Real Estate Sector Growth
Past Operational Challenges
Unprecedented Lending Growth
Bt130 billion ($US3.25 billion) in 2005 – all time record
Shortage of Funding Sources
The Government Housing Bank
Developing New Funding Sources
Traditionally Majority of Funding – Deposits (still 60%) and Government-Guaranteed Bonds
GHB now developing overseas funding sources
FRCDs Bt22.5 billion ($US564 million) as of 12/31/05
R/D & B/E Bt19.42 billion ($US486 million) as of 12/31/05
The Government Housing Bank
Developing New Funding Sources
Securitization of Mortgage Portfolio – Planned for 2006
Bt40 billion ($US1 billion)
Approximately Half domestic - Half overseas
Will be first real estate-backed securities issued by Thai financial institution
The Government Housing Bank
Final Challenge
Successful lending programs and strong infrastructure fuelling growth
Maintaining capital adequacy ratio as we grow
Remembering our role :GHB is not only a specialized housing lender A key catalyst in helping Thailand create an infrastructure that will support a sustainable long-term real estate sector
The Government Housing Bank
Thank You
The Government Housing Bank
I will be happy to entertain any questions
Government Housing Bank
63 Rama 9 Road, Huaykwang
Bangkok, Thailand 10310
Website: www.ghb.co.th, www.reic.or.th
E-mail: [email protected], [email protected]
Telephone: 66 (0) 2202 1967, 66 (0) 2202 1788
