Thai banks, businesses count cost of deadly protests

* Big banks a particular target of political violence

* Stock exchange damaged, closed on Thursday and Friday

* Big retailers waiting for access to stores to assess
damage

* Gross domestic product may shrink in Q2 from Q1

By Khettiya Jittapong and Arada Kultawanich

BANGKOK, May 20 (BestGrowthStock) – Banks were set on fire. A major
department store nearly collapsed. The stock exchange was
attacked. Tourists were trapped in hotels.

After two months of protests that ended in an arson spree,
Thailand is counting the economic cost and financial toll of a
crisis that threatens to carve deeply into Southeast Asia’s
second-biggest economy and squeeze margins of some companies.

The country’s second-largest lender, Krung Thai Bank
(KTB.BK: ), was among the first to announce its profit would
suffer from recent political violence in Bangkok.

The authorities said 39 properties had suffered fire
damage, including many bank branches. Markets and banks were
closed on Thursday. [ID:nSGE64J02F]

Bangkok Bank (BBL.BK: ), the country’s biggest lender, said
10 of its branches had suffered in the rioting.

Some branches at the bank — a target of the protesters
because of supposed links to the royalist elite they were
fighting — also were also damaged by grenades earlier in the
protest, which started in mid-March.

Krung Thai had a strong first quarter and had been planning
to raise its loan growth target for this year to a double-digit
percentage from 7 percent.

That was now under review, President Apisak Tantivorawong
told Reuters, adding that some of its branches and foreign
exchange booths had been damaged during the violence.

“Overall, the second quarter will be lower than the first,”
he said, referring to profit and lending. “Our performance was
not that good in April and there are more holidays in May.”

A fire at the Stock Exchange of Thailand had damaged the
building and part of its computer system, said Chairman Sompol
Kiatphaibool. The market is closed on Thursday and Friday.

CENTRAL WORLD

Central World, Southeast Asia’s second-biggest shopping
mall, was badly damaged. Zen, a trendy store at the front of
the complex, was destroyed, according to Central Pattana
(CPN.BK: ), which owns the mall.

Initial inspection showed the nearby Centara Grand Hotel,
operated by Central Plaza Hotel (CENT.BK: ), was not damaged.
Trouble continued late into the night on Wednesday despite a
curfew, and fire broke out in a Big C Supercenter (BIGC.BK: )
store near the protest site in central Bangkok.

The company, in which France’s Casino (CASP.PA: ) is a major
shareholder, said it had closed a branch in Khon Kaen province
in the northeast because protesters had destroyed part of it.

Major Cineplex (MAJO.BK: ), Thailand’s largest cinema chain
operator, said it had shut nine theatres on Thursday due to the
violence in Bangkok, including one in the torched Big C
complex.

The various malls at Rachaprasong intersection — the heart
of the “red shirt” camp from April 3 — had combined revenue of
around 5.2 billion baht ($161 million) in a normal month, said
Fafuen Temboonkiat of the Rachaprasong Square Trade
Association.

It was hard to assess losses for the moment, he said.
“Every operator wants to enter the area, so we can estimate the
damage, but we can’t because the area is closed by police.”

TOURISM HIT

Most firms will feel some effect from the violence.

This week was made a public holiday to keep people out of
the centre of Bangkok while the security operation was in
progress, so many businesses are closed or operating with
reduced staff.

The elevated Skytrain and underground railway are halted,
power outages have been experienced in parts of the capital
since Wednesday, and phone and Internet connections are
unstable.

The Tourism Council of Thailand, a private organisation,
has slashed its tourist target for this year to 13 million
from 16 million — versus last year’s total of 14.1 million —
because of the riots, an official told Thai PBS TV.

The state Tourism Authority of Thailand has cut its target
to 13 million from 15.5 million and slashed its revenue target
by a fifth to 480 billion baht ($14.8 billion).

Tourism accounts for 6 percent of gross domestic product
and employs at least 15 percent of the workforce, so consumer
spending is bound to suffer if many jobs are lost, as feared.

A source at the state planning agency, the National
Economic and Social Development Board (NESDB) said the economic
impact of the political turmoil and rioting would easily exceed
100 billion baht, getting on for 1 percent of gross domestic
product.

“Although the protest and political tension may be past its
worst, the impact and related losses are higher than people had
expected. What we need to see is how long it will take to
regain the confidence of foreign tourists and investors,” said
the official, declining to be identified.

The NESDB releases January-March GDP data on Monday.

“We expect first-quarter GDP could record its fastest
year-on-year growth in 14 years at around 10 percent,” said
economist Pimonwan Mahujchariyawong at Kasikorn Research
Center. “However, the worse-than-expected violence will cause a
sharp quarter-on-quarter contraction in the second quarter.”

Stock Market News

($1=32.35 Baht)
(Additional reporting by Saranya Suksomkij, Ploy Ten Kate,
Vithoon Amorn and Orathai Sriring; Writing by Alan Raybould.
Editing by Jason Szep)

Thai banks, businesses count cost of deadly protests