Download - January, 2005
January, 2005
INFONAVIT: The leading mortgage institution in
Mexico
www.infonavit.org.mx
DisclaimerDisclaimer
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.
ContentsContents
• Introduction to INFONAVIT
• INFONAVIT’s strategy
• Results 2000 – 2004
• Credit program for 2005
• Outlook 2005 - 2009
Mortgage Bank
Mortgage loan originator with a social purpose
Created in 1972; up-to date has originated more than 33
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 INFONAVITIntroduction to INFONAVIT
INFONAVIT’s dual natureINFONAVIT’s dual nature
“Collect funds for the National Housing Fund”
“Fulfill the mandate of originating loans”
“Collect invested funds”GoalGoal::
FISCAL COLLECTIONSFISCAL COLLECTIONS ORIGINATIONORIGINATION SERVICINGSERVICINGCoreCore
Processes:Processes:
• 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:Functions:
Introduction to INFONAVITIntroduction to INFONAVIT
BusinessBusiness modelmodel
Institutional relationshipsInstitutional relationships
As of December 2004As of December 2004
INFONAVIINFONAVITT
11,914,401 11,914,401 active workers in
the National Housing Fund
820,897820,897employers paying
contributions
2,284,1492,284,149outstanding mortgages
Introduction to INFONAVITIntroduction to INFONAVIT
Introduction to INFONAVITIntroduction to INFONAVIT
INFONAVIT as Pension Fund Manager: Assets under INFONAVIT as Pension Fund Manager: Assets under managementmanagement
November 2004November 2004
Source: Comisión Nacional del Sistema de Ahorro para el Retiro (CONSAR)
Mil
lio
n P
eso
s
0
100000
200000
300000
400000
500000
2000 2001 2002 2003 2004 e
Loan
s
INFONAVIT Others
IntroductionIntroduction to INFONAVIT to INFONAVIT
INFONAVIT as a mortgage institution: Origination 2000-2004INFONAVIT as a mortgage institution: Origination 2000-2004
Source: Conmisión Nacional de Fomento a la Vivienda (CONAFOVI)
73%62%
68% 58% 57%
27%38%
32%
42%43%
336,271 326,300
394,763
500,003 535,000
INFONAVIT as mortgage institution: 2003 OriginationINFONAVIT as mortgage institution: 2003 Origination
Introduction to INFONAVITIntroduction to INFONAVIT
Source:Inside Mortgage Finance Top 15 Retail Producers in 2003. Estimation assuming US$ 140,000 average loan
Lo
ans
INFONAVIT as a mortgage institution: Mortgage loan portfolioINFONAVIT as a mortgage institution: Mortgage loan portfolio
September 2004September 2004
Source: Comisión Nacional Bancaria y de Valores (CNBV)
Introduction to INFONAVITIntroduction to INFONAVITM
illi
on
Pe
sos
INFONAVIT as mortgage institution: 2003 ServicingINFONAVIT as mortgage institution: 2003 Servicing
Source:Inside Mortgage Finance Top 30 Mortgage Servicers in 2003. Estimation assuming US$ 140,000 average loan balance
Introduction to INFONAVITIntroduction to INFONAVIT
5,187
4,743 4,606
3,357
2,0461,760
-
1,000
2,000
3,000
4,000
5,000
6,000
WASHINGTONMUTUAL
WELLS FARGOHOME MORTGAGE
COUNTRYWIDEHOME LOANS
CHASE HOME INFONAVIT BANK OFAMERICA NA
Th
ou
san
d l
oan
s
INFONAVIT’s StrategyINFONAVIT’s 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
VisionMissionGoals
Strategic Plans
• Cultural change: Intranet Workers Union Intensive computer use Board administration
APPRAISALS
COLLECTION AGENCIES INFONAVITBUILDERS
NOTARIES
BUILDER INSPECTOR
BANKS
OUTSOURCINGBased on: Capabilities Regulatory
framework
60.9% 57.1% 52.9% 49.6% 44.6%
34.2%40.4%
45.3%48%
49.9%
4.9%
2.5%1.9%
2.4%
5.4%
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2000 2001 2002 2003 2004
Mill
ion
Pes
os
Employers contributions Loan Payments Others
38,237
45,54252,266
59,822
69,498CAGR = 16.1%
Total cash inflowsTotal cash inflows
Results 2000 - 2004Results 2000 - 2004
CAGR = Compounded Annual Growth Rate
205,346245,742 242,283
205,536
27,926 55,45390,327
1,3322,264 10,112
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
2001 2002 2003 2004
Lo
ans
Traditional Economic Apoyo INFONAVIT
CAGR = 14.1%
Results 2000 - 2004Results 2000 - 2004
Loan originationLoan origination
205,346
275,000300,000 305,975
CAGR = Compounded Annual Growth Rate
Past-due loans and coveragePast-due loans and coverage
Results 2000 - 2004Results 2000 - 2004
21.7%15.2% 12.5%
9.5%8.6%
78.8%
102.5%113.4%
146.9%
170.9%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
2000 2001 2002 2003 2004 e
Pas
t-d
ue
loan
s
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
160.0%
180.0%
Co
vera
ge
Past-due loans Coverage
1,2681,655
3,148
4,290
5,025
0
1,000
2,000
3,000
4,000
5,000
2000 2001 2002 2003 2004
Mil
lon
Pes
os
Cash inflows from fiscal collectionsCash inflows from fiscal collections
396.3%
Results 2000 - 2004Results 2000 - 2004
Results 2000 - 2004Results 2000 - 2004
Real return to National Housing FundReal return to National Housing Fund
Standard & Poor’s rating: stable outlookStandard & Poor’s rating: stable outlook
Results 2000 - 2004Results 2000 - 2004
• Key role to attend Mexico’s 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
Long Term mxAAA A- BBB-
Short Term mxA-1+ A-2 A-3
Domestic Scale
Global Scale
Local Currency
Local Currency
Foreign Currency
2004 Securitization Program2004 Securitization Program
• First transaction issued in March 2004 (CEDEVIS 04) 750.5 million pesos Denominated in nominal pesos Fixed Nominal rate. Benchmark M7. Spread 0.88% Rated mxAAA by Standard and Poor’s, AAA(mex) by
Fitch and AAAmx by Moody’s
• 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 & Poor’s, AAA(mex) by
Fitch
Results 2000 - 2004Results 2000 - 2004
Public offers in Mexico, targeting Mexican institutional investors
Credit program for 2005Credit program for 2005
Definition of mortgage productsDefinition of mortgage products
Program Infonavit Funding Property value Key features
Economic 100% Up to USD 15,000
Traditional, Low Income 100%Between USD 15,000
and USD 38,000Worker's salary up to 3.9x minimum wage
Traditional 100%Between USD 15,000
and USD 38,000
Co-funding PartialBetween USD 15,000
and USD 38,000Mixed funding with commercial / mortgage bank
Apoyo Infonavit Guarantee Up to 80,000100% funding provided by commercial / mortgage bank
9.8 million beneficiaries WITHOUT credit to October 2004
Credit program for 2005Credit program for 2005
Market strategyMarket strategy
0 -3.9 SM
4 - 6.9 SM
7 - 10.9 SM
78%
12%
More than 11 SM
Traditional ProgramLow Income
Economic Program
Traditional Program
Co-funding
“Apoyo INFONAVIT”
5%
5%
20,000
55,000
90,000
90,000
Goal 2005
120,000
375,000
5.3%
14.7%
24.0%
24.0%
32.0%
100%
Comparison between 2005 vs 2004 credit goals, by property Comparison between 2005 vs 2004 credit goals, by property type type
Credit program for 2005Credit program for 2005
80,31690,725
104,570
116,912
129,542
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2005 2006 2007 2008 2009
Mill
ion
Pes
os
Expected cash inflowsExpected cash inflows
Outlook 2005 - 2009Outlook 2005 - 2009
CAGR = 12.69%
CAGR = Compounded Annual Growth Rate
Outlook 2005 - 2009Outlook 2005 - 2009
Projected credit program 2005-2009Projected credit program 2005-2009
CAGR = 10.3%
CAGR = Compounded Annual Growth Rate
Percentage of beneficiaries with incomes up to 3.9 vsm
56%
58.6%59.8%
60% 60.4%
120,000 130,000 145,000 165,000 175,000
235,000 280,000 310,000 325,000 340,000
25,000 30,000 35,000 40,00020,000
0%
20%
40%
60%
80%
100%
2005 2006 2007 2008 2009
Economic Traditional Medium / Residential
375,000 435,000 485,000 525,000 555,000
Outlook 2005 - 2009Outlook 2005 - 2009
Projected credit program 2005-2009Projected credit program 2005-2009
32%
62.7%
5.3%
31.5%
61.3%
7.2%
Outlook 2005 - 2009Outlook 2005 - 2009
7.0%
5.0% 5.0% 5.0%5.0%
92.2%
110.5%
110.5% 110.5% 110.5%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
2005 2006 2007 2008 2009
80.0%
85.0%
90.0%
95.0%
100.0%
105.0%
110.0%
115.0%
Past-due loan ratio and coveragePast-due loan ratio and coverage
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
2000 2001 2002 2003 Projected2004
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
160.0%
180.0%
Past-due loans Coverage
Outlook 2005 - 2009Outlook 2005 - 2009
CapitalizationCapitalization
Outlook 2005 - 2009Outlook 2005 - 2009
Projected real return to National Housing FundProjected real return to National Housing Fund
4.00%4.00%4.00%4.00%
3.50%3.50%
3.75%
4.00%
2005 2006 2007 2008 2009
January 2005
INFONAVIT: The leading mortgage institution in
Mexico
www.infonavit.org.mx