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I N F O N A V I T. October, 2007. INFONAVIT, tu derecho a vivir mejor.

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INFONAVIT, tu derecho a vivir mejor

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Infonavit tu derecho a vivir mejor

I N F O N A V I T

October,2007

INFONAVIT, tu derecho a vivir mejor


Infonavit tu derecho a vivir mejor

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.

These materials are not an offer for sale of the Securities of Instituto del Fondo Nacional de la Vivienda para los Trabajadores in the United States. The Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1993, as amended. Instituto del Fondo Nacional de la Vivienda para los Trabajadores does not intend to register any portion of the offering in the United States or to conduct a public offering of the Securities on the United States.


Agenda

Agenda

  • Introducing INFONAVIT

  • Transformation 2001-2006

  • Outlook 2007-2011


Introducing infonavit

INFONAVIT is an autonomous institution; its corporate governance contains equal representation from the labor sector, the employer sector and the Federal Government

INFONAVIT has a dual nature:

Pension Fund Manager: since 1992 it is part of the National Pension System (SAR); workers’ funds are held in separate individual accounts with minimum guaranteed annual returns

Mortgage Bank: mortgage lender with a social mandate; to date, it has originated more than 4 million mortgages

INFONAVIT is a fiscal authority in Mexico

Introducing INFONAVIT


Introducing infonavit1

INFONAVIT is a principal player in the Mexican mortgage market:

It is the largest mortgage lender

It is the main issuer of Residential Mortgage-Backed Securities (RMBS)

Introducing INFONAVIT

Source: INFONAVIT and Sociedad Hipotecaria Federal (SHF), 2006.

CEDEVIS: Certificados de Vivienda

Source: Comisión Nacional de Vivienda (CONAVI), 2006.


Transformation 2001 2006 strategy

2000

2006

Var.%

  • Number of employees

4,941

3,823

-29%

  • Productivity in origination (loans/person)

41

110

168%

  • Productivity in servicing (loans/person)

314

754

140%

  • Employee turnover

0.80%

1.80%

100bp

  • Organization Structure (levels)

120

16%

-100%

  • Renovation top management

87%

Transformation 2001-2006: Strategy

  • People

INFONAVIT´s Professionalization and Development System


Transformation 2001 2006 strategy1

Financial Institutions

Appraisers

Notaries

Collect

Collect

funds

funds

fot

fot

the

the

Fullfill

Fullfill

the

the

mandate

mandate

of

of

Collect

Collect

invested

invested

funds

funds

Goal

Goal

:

:

Goal

Goal

:

:

National

National

Housing

Housing

Fund

Fund

originating

originating

loans

loans

Core

Core

Core

Core

FISCAL COLLECTIONS

FISCAL COLLECTIONS

ORIGINATION

ORIGINATION

SERVICING

SERVICING

ORIGINATION

ORIGINATION

SERVICING

SERVICING

Processes

Processes

:

:

Processes

Processes

:

:

Systems

Systems

:

:

Systems

Systems

:

:

PSCD

PSCD

ALS

ALS

PSCD

PSCD

ALS

ALS

OCI

OCI

OCI

OCI

SAP

SAP

Channels

:

Website

, INFONATEL

Channels

:

Website

, INFONATEL

Collection Agencies

Housing

Developers

Constructor Auditor

Transformation 2001-2006: Strategy

  • Technology, processes and outsourcing


Transformation 2001 2006 strategy2

BANXICO

8th

Month

1rst

Month

2nd

Month

3rd

Month

4th

Month

5th

Month

6th

Month

7th

Month

VIV

ACV

COMPANY (ROA)

ROA:

REA:

Transformation 2001-2006: Strategy

  • Collection Process

Rating Moody´s SQ1(-)

Ordinary Collection Process

A worker without employment, or

who is not affiliated

with INFONAVIT,

makes payments at the bank (REA)

For a formal sector employee, payments are made through Company Contribution and Payroll Discount (Aportaciones Patronales y Descuento en Nómina, ROA)

VIV: Contributions to Housing Fund

ACV: Principal and Interest payments

of Mortgage Portfolio

Day 12th

Day 19th

Day 17th

Day 19th

BANKS

Social Collection Process (Work Out)

Specialized Recovery

Conciliatory

Party

Recovery

Collections


Transformation 2001 2006 strategy3

2000

2006

Var.%

  • NPL Ratio

21.7%

4.8%

-17pb

  • Fiscal Collections (millions of Pesos)

$1,268

$6,684

427%

  • Cash inflows (millions of Pesos)

$38,237

$91,248

138%

  • Expenses (% Loan Program)

6.61%

5.45%

-116pb

  • Loan Loss Provisions

80.6%

297%

124.5pb

  • Securitization (millions of Pesos)

$0

$6,000

100%

Transformation 2001-2006: Strategy

  • Financials

Rating S&P mxAAA


Transformation 2001 2006 strategy4

2000

2006

Var.%

  • Loans originated

250,110

421,745

69%

  • % loans < MX$6,150 (4 xMW )

50%

57%

700bp

  • Real return paid to the housing fund

2.0%

4.0%

200bp

Transformation 2001-2006: Strategy

  • Institutional and Service

Reforms to the INFONAVIT law have strengthened corporate government, financial supervision, transparency and accountability


Outlook 2007 2011 strategy

Outlook 2007-2011: Strategy

  • Business Model

PrimaryMarket

LendingStrategy

SecondaryMarket

FundingStrategy

MARKET

CAPITAL

MARKETS

FISCAL

COLLECTIONS

ORIGINATION

SERVICING

  • SUBSIDIES

  • DONORS

  • MULTILATERALS


Outlook 2007 2011 funding strategy

Outlook 2007-2011: Funding Strategy

  • CEDEVIS


Outlook 2007 2011 funding strategy1

70,000

60,000

50,000

40,000

44,000

MXN$ million

30,000

34,000

21,000

20,000

10,500

6,000

10,000

14,000

12,500

11,000

9,500

8,000

-

2007

2008

2009

2010

2011

Base Scenario

Potential Scenario

Outlook 2007-2011: Funding Strategy

  • CEDEVIS

10.0% Assets

1.5% Assets


Outlook 2007 2011 lending strategy

Outlook 2007-2011: Lending Strategy

  • Demand

Monthly Income

Times MinimunWage

> 11

5.1%

4.9%

7 – 10.9

12.4%

4 – 6.9

2 – 3.9

35.0%

< 2

42.6%

10.1 millionworkers


Outlook 2007 2011 lending strategy1

Outlook 2007-2011: Lending Strategy

  • Market characteristics


Outlook 2007 2011 lending strategy2

1,200,000

1,000,000

1,000,000

1,000,000

800,000

800,000

800,000

800,000

700,000

650,000

600,000

600,000

540,000

Loans

500,000

400,000

200,000

-

2007

2008

2009

2010

2011

Base Scenario

Potential Scenario

Outlook 2007-2011: Lending Strategy

  • Lending objectives

“One million loans in 2010”


Infonavit tu derecho a vivir mejor

I N F O N A V I T

October, 2007

INFONAVIT, tu derecho a vivir mejor


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