Flooding impact on Thai banks ‘manageable’

Only a small number of branches have been affected.

Thailand’s commercial banks should be able to weather the impact of recent floods thanks to their digitization efforts as well as relief measures.

Flooding hit several provinces in Thailand in October 2024, including Chiang Mai, according to S&P Global Ratings. Damages are estimated at $900m or approximately 0.17% of the country’s GDP, according to data from the Thai Chamber of Commerce.

Commercial banks have less than 12% of their branches located in northern Thailand, and only a small number have been physically affected, the ratings agency said.

Banks’ digitalization efforts have also reduced reliance on physical touchpoints. 

The flooding has also affected a region that makes up only 3.3% of commercial banks’ loan books, S&P said.

“Flooding has mainly affected certain households and consumers in northern Thailand, particularly those in agriculture, which do not amount to a material exposure for commercial banks,” S&P added.

A recent wave of relief measures by both the government and banks will also cushion the impact.

The Thai government has recently given out $300 (THB10,000) per eligible Thai under a digital wallet program targeting low-income segments in the country. Separately, the government is disbursing relief to flood victims.

For their part, financial institutions are offering relief measures such as temporary reductions in interest payments and extensions of repayments to alleviate shortfalls in cash flow among flood-affected customers. 

“We understand such requests have been low in volume to date,” S&P said, on demand for such relief measures.