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January, 2005 INFONAVIT: The leading mortgage institution in Mexico www.infonavit.org.mx.

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Presentation on theme: "January, 2005 INFONAVIT: The leading mortgage institution in Mexico www.infonavit.org.mx."— Presentation transcript:

1 January, 2005 INFONAVIT: The leading mortgage institution in Mexico

2 Disclaimer This presentation may contain forward-looking statements. These statements may include the plans and objectives of management for future operations and financial goals, loan portfolio growth, and availability of funds. These forward- looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors that could cause actual results to differ materially include the uncertainties of economic conditions, and future strategic decisions, all of which are difficult or impossible to predict accurately, and may of which are beyond the control INFONAVIT. Although INFONAVIT believes that the assumptions underlying the forward-looking statements included herein are reasonable, any of the assumptions could be inaccurate and therefore there can be no assurance that the forward-looking statements included herein will prove to be accurate. Therefore, the inclusion of such information should not be regarded as a representation by INFONAVIT or any other person that the objectives and plans of INFONAVIT will be achieved.

3 Contents Introduction to INFONAVIT INFONAVITs strategy Results 2000 – 2004 Credit program for 2005 Outlook

4 Mortgage Bank Mortgage loan originator with a social purpose 3 Created in 1972; up-to date has originated more than 3 million mortgages Tripartite governance system with equal representation of labor sector, employers sector and the Federal Government Pension Fund Manager Since the 1992 reform, it is part of the Pension Fund System Workers´ funds are held in separate individual accounts with minimum guaranteed returns Added to pension fund savings at retirement Introduction to INFONAVIT INFONAVITs dual nature

5 Collect funds for the National Housing Fund Fulfill the mandate of originating loans Collect invested funds Goal: FISCAL COLLECTIONS ORIGINATIO N ORIGINATIO NSERVICING CoreProcesses: Fund Management Service to workers and employers Fiscal Collections Processing Underwriting Closing Loan marketing and promotion Product Design Loan Administration Collections Special collections (Work Out) File custody Functions: Introduction to INFONAVIT Businessmodel Business model

6 Institutional relationships As of December 2004 INFONAVIT 11,914,401 11,914,401 active workers in the National Housing Fund 820,897 employers paying contributions 2,284,149 outstanding mortgages Introduction to INFONAVIT

7 INFONAVIT as Pension Fund Manager: Assets under management November 2004 Source: Comisión Nacional del Sistema de Ahorro para el Retiro (CONSAR) Million Pesos

8 Introduction to INFONAVIT INFONAVIT as a mortgage institution: Origination Source: Conmisión Nacional de Fomento a la Vivienda (CONAFOVI) 73% 62% 68% 58% 57% 27% 38% 32% 42% 43% 336, , , , ,000

9 INFONAVIT as mortgage institution: 2003 Origination Introduction to INFONAVIT Source:Inside Mortgage Finance Top 15 Retail Producers in Estimation assuming US$ 140,000 average loan Loans

10 INFONAVIT as a mortgage institution: Mortgage loan portfolio September 2004 Source: Comisión Nacional Bancaria y de Valores (CNBV) Introduction to INFONAVIT Million Pesos

11 INFONAVIT as mortgage institution: 2003 Servicing Source:Inside Mortgage Finance Top 30 Mortgage Servicers in Estimation assuming US$ 140,000 average loan balance Introduction to INFONAVIT Thousand loans

12 INFONAVITs Strategy Economic Housing Origination Rules Reserve Policies Accounting and supervision Risk management Technology Remote channels De-regulation ISO 9000 Innovation, Quality and Efficiency Renewed social focus, sound financial practices Vision Mission Goals Strategic Plans Cultural change: Intranet Workers Union Intensive computer use Board administration APPRAISALS COLLECTION AGENCIES INFONAVIT BUILDERS NOTARIES BUILDER INSPECTOR BANKS OUTSOURCING Based on: Capabilities Regulatory framework

13 CAGR = 16.1% Total cash inflows Results CAGR = Compounded Annual Growth Rate

14 CAGR = 14.1% Results Loan origination 205, , , ,975 CAGR = Compounded Annual Growth Rate

15 Past-due loans and coverage Results

16 Cash inflows from fiscal collections 396.3% Results

17 Real return to National Housing Fund

18 Standard & Poors rating: stable outlook Results Key role to attend Mexicos large housing deficit Expected future cash flows will remain in excess of mandatory payments Profitability levels and internal capital generation will strengthen as a result of improvement in collections and asset quality Expected to maintain its robust base of reserves Sound risk management procedures will enable Infonavit to manage credit and operational risks to protect generation of adequate returns

19 2004 Securitization Program First transaction issued in March 2004 (CEDEVIS 04) million pesos Denominated in nominal pesos Fixed Nominal rate. Benchmark M7. Spread 0.88% Rated mxAAA by Standard and Poors, AAA(mex) by Fitch and AAAmx by Moodys Second transaction issued in November 2004 (CEDEVIS 04U) 1,208.8 million pesos Denominated in UDIs Fixed Real rate. Benchmark UDI Bono 10. Spread 0.78% Rated mxAAA by Standard & Poors, AAA(mex) by Fitch Results Public offers in Mexico, targeting Mexican institutional investors

20 Credit program for 2005 Definition of mortgage products

21 9.8 million beneficiaries WITHOUT credit to October 2004 Credit program for 2005 Market strategy SM SM SM 78% 12% More than 11 SM Traditional Program Low Income Economic Program Traditional Program Co-funding Apoyo INFONAVIT 5%5% 5%5% 20,000 55,000 90,000 Goal , , % 14.7% 24.0% 32.0% 100%

22 Comparison between 2005 vs 2004 credit goals, by property type Credit program for 2005

23 Expected cash inflows Outlook CAGR = 12.69% CAGR = Compounded Annual Growth Rate

24 Outlook Projected credit program CAGR = 10.3% CAGR = Compounded Annual Growth Rate 56% 58.6% 59.8% 60% 60.4%

25 Outlook Projected credit program % 62.7% 5.3% 31.5% 61.3% 7.2%

26 Outlook Past-due loan ratio and coverage

27 Outlook Capitalization

28 Projected real return to National Housing Fund

29 January 2005 INFONAVIT: The leading mortgage institution in Mexico


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