Rapid Assessment for Resilient Recovery and ... - GFDRR

There are also numerous NGO microfinance institutions, but they appear to be very fragmented
and on average very small, and have not been included in this assessment.
Non-Bank Finance Companies
At the time of writing, the leasing sector was not very developed, particularly if vehicle
leasing and hire purchase are excluded. For example, there are only 16 members in the
Thailand Leasing Association, with total assets of around THB 100 billion, and only half
of those are involved in industrial leasing. Though banks are beginning to get involved in
leasing, not least because joint ventures are now subject to stricter related lending limits,
even within banks this is still a nascent business sector. 53 As with the other sub-sectors,
very low assessments of damage to the physical assets of leasing companies were
reported. 54
As an example of the scale of possible losses, one leasing company with assets representing
around 10 percent of the industry had a total of 80 clients affected by the floods,
with a total of THB 1.5 billion outstanding, but most of these clients were well-insured.
Data for vehicle leasing was not available although it would appear that such vehicles
would be well-insured, and therefore losses for this product would also not be significant. 55
Credit card companies also represent a tiny fraction of the financial sector. According to
BOT figures, total credit card debt amounts to THB 206 billion. Of that amount, banks
hold 80 percent, and this amount is already counted under total bank loans. Of the remaining
THB 41.2 billion, a rate of additional NPLs that is twice that of SFIs is assumed,
i.e. 10 percent, given that (a) there is no collateral involved, and (b) credit card companies’
clients tend to be the less obviously creditworthy ones, who may well have tried
but failed to get bank credit cards. Write-offs and lost interest are then calculated as with
SFIs, except for an assumed interest rate of 20 percent.
Stock and Bond Markets
Damage to the stock and bond markets, and associated traders, are negligible. The impact
of the floods on the stock market appears to be temporary and reversible. Although
the Stock Exchange of Thailand (SET) index and trading volumes have reduced since
July, this is likely more to do with international events than with the floods. For example,
the SET index was down 13.2 percent by end of October, compared to end of July – but
this is about the same as Hang Seng’s 13.8 percent or Nikkei 225’s 13.1 percent for
the same period. 56 In terms of average monthly trade volume, the SET was down 19.8
percent in October compared to July, but this compared favorably to the Kuala Lumpur
Stock Exchange’s 44 percent drop or to the Hang Seng’s 22.6 percent drop. 57
53 As per discussion with the Chairman of the Thailand Leasing Association
54 As per discussion with the Chairman of the Thailand Leasing Association
55 This assumption is subject to verification
56 Though Kuala Lumpur Stock Exchange was an outlier with only a 4.9% drop for the same period
57 No figures found for trading volumes for the Nikkei 225.
THAI FLOOD 2011 RAPID ASSESSMENT FOR RESILIENT RECOVERY AND RECONSTRUCTION PLANNING
63