KTB expects low impact from flooding crisis

President Apisak Tantivorawong said yesterday that the bank had few customers in the Rojana Industrial Park and Saha Rattana Nakorn Industrial Estate in flood-stricken Ayutthaya.
Most manufacturers there are foreign companies and tap foreign banks more than local banks.
KTB’s main customers are in industrial estates in the East such as Amata Nakorn and Eastern Seaboard, which are far from the flooding.
The bank needs time to evaluate the impact of the flood before saying whether its operations will be curtailed.
However, banks might not face serious problems or higher non-performing loans (NPLs) as customers with insurance can use their claim settlements to pay down their debts.
The bank had to close its nine branches in Ayutthaya because of the severe flooding in the province, but is still providing normal banking services.
The Bank of Thailand has called on the country’s five major banks to prepare their transaction operations for emergencies to ensure services are available to customers, Apisak said.
Finansia Syrus Securities expects the flooding crisis to erode loan quality. Higher NPLs will be seen this quarter as borrowers delay debt servicing by more than three months. Massive flooding in the past was not a main factor behind rising NPLs. However, the current flood is spreading into industrial areas. Finansia expects NPLs will increase by 1-2 percentage points of outstanding loans of banks.
Kasikornbank last week reported that the natural disaster had caused difficulties for 60 customers with loans totalling Bt3.8 billion to Bt4 billion, which is 0.4 per cent of its outstanding loans.
Finansia said that using the 0.4-per-cent figure, flood-affected loans at banks would be worth Bt38 billion and they would have to take Bt15 billion in loan-loss provisions, or 15 per cent of total net profits.