“ The Role of Specialized Housing Lenders ”

1. The Government Housing Bankof Thailand “The Role of Specialized Housing Lenders” March 15, 2006

2. Presented toThe World Bank Group “Housing Finance in Emerging Markets”Washington, DC, USAby Khan Prachuabmoh, PresidentGovernment Housing Bank of Thailand

3. The Government Housing Bank • Established 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

4. 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

5. The Government Housing Bank One of Thailand’s Best Performing Banks • 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)

6. The Government Housing Bank One of Thailand’s Best Performing Banks Best Performing State Enterprise 2005 Winner of Awards in all Categories • Best Performance • Best Board of Directors • Best Management

7. 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

8. 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

9. 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

10. 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

11. The Government Housing Bank Innovative Housing Finance Programs& other Government Policy InitiativesHire 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

12. 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

13. The Government Housing Bank Must More Than Just A Lending Institution Creating Infrastructure That Sustains Long-tem Real Estate Sector Growth • 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)

14. The Government Housing Bank Past Operational Challenges • Unprecedented Lending Growth • Bt130 billion ($US3.25 billion) in 2005 – all time record • Shortage of Funding Sources

15. 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

16. 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

17. 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

18. The Government Housing Bank Thank You I will be happy to entertain any questions

19. Government Housing Bank 63 Rama 9 Road, Huaykwang Bangkok, Thailand 10310 Website: www.ghb.co.th, www.reic.or.th E-mail: khan@ghb.co.th, info@reic.or.th Telephone: 66 (0) 2202 1967, 66 (0) 2202 1788