Initially, offering fund is for civil servants in Phnom Penh and it will be available through the banks a standalone bank account with its own ATM card. Having the account accessible through the bank would allow the correct funds to get to the end-users in a timely manner.

Chou Ratanak, the director for the Fund, was quoted by the Post as saying that the new NSSFCS fund aims to manage and insure a social security fund for when a civil servants retires or becomes handicapped, pregnant or is involved in an accident at work resulting in disability or death.

“Moreover, they can save their money through the fund, which will also have an interest rate with Canadia Bank,” Chou Ratanak said.

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This year, NBC approved three foreign banks to operate in Cambodia, including the Bank of Agriculture and Rural Development of Vietnam (Agrbank), the CIMB Group and Malaysia and the Bank of China.

Thai Saphear, head of the NBC governor’s office, was quoted by the Phnom Penh Post as saying that a courtesy call from China’s new ambassador to Cambodia, Pan Guangxue, resulted in NBC Governor Chea Chanto giving the green light for the BOC to establish itself in Cambodia as early as the end of this year.

He added that “it’s a positive sign for the bank because they have the green light from the NBC already.” “It’s up to the bank if it wants to open its branch soon or not, but if they want to open soon, it could be done this year.” said he.

Following the in-principle approval, the bank has six months to prepare the required documentation to obtain the full operating licence, he said.

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Phan Ying tong, the bank’s country head, was quoted by the Post as saying in press release Thursday that the opening of the branch is part of its long-term strategy of organic growth to expand its branch network and provide excellent customer service.

Cambodian Public Bank Plc commenced its business in Cambodia on May 25, 1992. Presently, it has 19 branches including 7 in Phnom Penh, 1 each in Preah Sihanouk, Siem Reap, Battambang, Kampong Cham, Takmao, Pol Pet, Bavet, Kampot and Phnom Penh Special Economic Zone and a Service Branch each in Monivong, Phsar Doeumkor and Toul Tom Poung.

According to Campu Bank’s website, as December 31, 2009, Campu Bank’s paid-up capital of USD90 million is the highest among the commercial banks in Cambodia while its shareholder’s funds and asset size amounted to USD176.6 million and USD43.3 million respectively.

Campu Bank is a wholly-owned subsidiary of Public Bank Group which is one of the largest and strongest domestic banking groups in Malaysia.

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Recently, ACLECA has launched a top-up service suing mobile-phone technology and a service which allows customers to pay bills via phone.

In Channy, president and CEO of ACLEDA bank, said during the grand occasion that “sustainability is a vital vision of ACLEDA bank. It was founded with such sustainability for 17 years ago to provide exclusive financial services for all- both private and public. This continues to be our guiding principle today throughout the 248 branches and offices in the Kingdom of Cambodia and the Lao PDR.”

He also expressed his grateful thanks to the Royal Government, the National Bank of Cambodia, the local authorities, and all nearly one million loyal customers who had always supported ACLEDA Bank so that the bank could launch the first leading mobile-phone financial service in Cambodia called “The ACLEDA Unity”, the safety, convenient, reliable, and fast means for its customers to transact from anywhere, anytime without coming to the branches or offices. It additionally confirms sustainable and strong relationships between ACLEDA Bank and the community which is the powerful tools to social and economic development of Cambodia.

“Currently ACLEDA Bank has 76 standard offices to provide the most comfortable and efficient facilities for our customers to conduct their financial transactions. Our investment is not only about convenience or image, but also long-term commitment to the community to safeguard the assets of our customers who depend on ACLEDA Bank,” he continued.

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The bank’s NPL rate – counted as loans the borrower has defaulted on for three months – rose to 6 percent from 5.56 percent in the last quarter of 2009. Lending remained at US$105 million each quarter.

“We’re still cautious in evaluating clients for loans, and it’s currently hard to get a good client with a good business plan,” FTB General Manager Gui Anvanith said last week. “We’ll dare to lend as much as $50 million if it’s a good business project.”

The FTB has witnessed a huge turnaround in its non-performing loans from 2008, when it had the highest NPL rate in Cambodia at 32 percent. By the end of 2009, that rate had been cut to 5.56 percent, surprising bank managers themselves.

Like other banks in the Kingdom, FTB is maintaining high liquidity, with $168 million deposited in the central bank at the end of last year.

FTB is focusing on business ventures, small and medium-sized enterprises and agricultural businesses, rather than real estate developments, Gui Anvanith said.

“We have little appetite for hotel-development projects,” he said. “For those in [Phnom Penh], we might consider them, but those in Siem Reap, we say no, as the province is too crowded with hotels.”

The bank is avoiding other real estate projects, such as apartments, with tens of thousands of units built and many unable to find buyers, he said.

Deposits at the FTB rose 1.7 percent, to $230 million, quarter on quarter, and the bank posted a first-quarter net profit of $1.38 million.

Stephen Higgins, CEO of ANZ Royal Bank, said business conditions for banks have been improving so far this year.

“First-quarter performance has been strong at [ANZ Royal], with revenue more than 20 percent higher than for the first quarter last year,” he said.

Higgins expects his bank to comfortably surpass results for 2009, when the bank’s NPL rate nearly doubled to 5 percent.

Cambodian banks and lending institutions saw their NPL rates rise after the global economic downturn, as borrowers abandoned projects and payments.

The National Bank has said the rate of NPLs is not of great concern, as it has remained below 10 percent of all outstanding loans.

Source: the phnom penh post

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Lending at Canadia Bank rose 5 percent, to US$405 million, in the first quarter, up from $385 million at the end of 2009.

Business loans have picked up since the last quarter of last year, after a steady decline in the first three quarters of 2009, Canadia Vice President Dieter Billmeier told the Post Thursday.

“The lending growth is not on a high curve, but [it is] consistent,” he said.

Loan demand picked up in agriculture, the service sector and tourism, while general buying and selling of homes increased, he said.

Meanwhile, the bank’s non-performing loan (NPL) rate improved, dropping 8 points, to 4 percent, from 2009’s last quarter.

“For this year, we consider the outlook for the whole of 2010 optimistic and see our loan portfolio growing from $430 [million] to $450 million of bankable loans,” Billmeier said.

“We are also optimistic that we can hold the non performing loan ratio for the whole of 2010 at 4 percent.”

Billmeier said deposits grew 18 percent in the first quarter, to around $655 million.

ACLEDA Bank saw better growth in lending than it did in deposits for the first quarter, posting an increase in loans of 8.8 percent, or $585.5 million, and an increase of deposits of 7 percent, to $736 million.

“We expected over 30 percent growth [in loans] for this year,” ACLEDA President In Channy said Thursday.

The bank is trying to manage deposit growth and high liquidity, and has already slashed 1.25 percent from its one-year deposit rate, he said. “What we want is to release more lending, to balance between loans and deposits.”

In order to improve its loan ratio, ACLEDA cut interest rates on three occasions, for a total 5 percent, on loans above $300,000, down to a rate of 10 percent for year-long loans and 12 percent for longer-term lending.

ACLEDA’s NPL rate hit 0.7 percent in the first quarter, down from 1.05 percent at the end of 2009. Net profit for the quarter was $4 million.

“It’s a lot of profit in the [first quarter],” In Channy said. “For the whole of last year, we earned a net profit of only $9.9 million. So based on the first-quarter results, we expect to see about 15 percent up in net profit this year over last year.”

New banks also saw better lending this quarter.

Angkor Capital Bank’s lending grew 15 percent, to $15 million, while deposits grew 20 percent, to $22 million.

“We are still new here, so we are constantly growing in both lending and deposits,” Angkor Capital General Manger Alex Ng said Sunday.

“But for lending, we see that the loan demand is still too weak, and we’re still quite careful about giving out loans.”

Ramesh Chandra Baliarsingh, chief executive of Bank of India, which launched in May 2009, said his bank had a limited period of operation last year, making quarterly comparisons less important.

Source: The Phnom Penh Post

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Chea Chanto, NBC’s governor, also has warned tourists and the public to be careful of being defrauded by unlicensed money changers along Cambodia’s borders.

Money exchange shop

According to the announcement of NBC, “in order to guarantee personal interests and prevent accidental losses, the public should be careful, and in case of requiring the exchange of money, please, the public must change in shops that show their license, which is issued by the National Bank of Cambodia.”

The Phnom Penh Post quoted Chea Chanto as saying that “to avoid eventually losing out, customers should have their money exchanged at booths displaying operating licenses from the central bank.”

According to the notice, a few money changing shops, particularly along the border with Thailand have cheated visitors and have even passed counterfeit Cambodian riel to customers.

NBC inspection of money-changing racket on the Kingdom’s borders found many offered exchange rates far below the market rate, some as low as 2,500 riels for US$1. A dollar was worth 4,167 riels Monday, the Post reported.

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Although neither Jardines nor FMO, the Dutch development bank that sold its stake in ACLEDA, has announced the price of the sale due to a clause in the sale agreement, In Channy said Sunday that it would be considerably more than the $12.51 million book value of the stake.

“The sale price would be much higher than this amount because our bank has gained profits consistently,” he told the Post, adding that a confidentiality agreement signed between the three parties involved meant ACLEDA could not disclose the sum paid by Jardines. “However, it’s the market price.”

Shareholders’ equity in ACLEDA Bank at the time the agreement was signed was $102.69 million, according to In Channy. FMO held 8.34 million shares out of a total 68.15 million, he added, meaning their stake was worth $12.51 million.

FMO originally invested $490,000 in Cambodia’s second-largest lender in 2000 when it was a simple microfinance organisation, and had remained an investor – regularly injecting capital into the firm through a series of rights issues – as it developed into a hybrid bank that also receives deposits.

Alain Cany, group country chairman of Jardine Matheson Vietnam and a future director of ACLEDA once the deal is complete, was unavailable for comment Sunday.

ACLEDA Vice President John Brinsden said that opportunities to buy stakes in proven lenders in emerging markets, such as ACLEDA, were rare, as shown by the high level of interest.

“Almost every week we get investors with a good background asking,” he said, although he declined to say whether the bank or its current stakeholders were in further talks to sell a stake in the bank.

Investment fund Leopard Capital announced in July last year that it was competing to acquire a stake in ACLEDA. At the time, Jardines was already in talks with FMO and the bank about a purchase.

Thomas Hugger, executive director at Leopard Capital, said then that the fund was limited to a maximum $15 million investment in any one venture in the Kingdom. However, this was when Leopard was still targeting $100 million in total capital – thus far it has raised about one-third of this original target.

Leopard Capital Chief Investment Officer Scott Lewis said Sunday that Jardines would have looked very carefully at the profitability of other leading banks in emerging markets in the region, and especially those in Vietnam, to price the asset.

“Based on the profitability of banks of similar profile, I would expect it to be priced at a very significant premium to book value,” he said.

ACLEDA Bank recorded net profits of $2.32 million in the third quarter, according to company financial statements, a 72 percent leap on the previous quarter. Total profits for the first nine months reached $6.578 million mean the bank is unlikely to match the $19.4 million in profits before tax recorded in 2008, a record year.

The International Monetary Fund warned this month that Cambodia’s banks are likely to suffer dropping profitability this year as they continue to struggle to lend.

Moody’s considered revising ACLEDA’s rating in May based on the turbulent conditions within the Kingdom’s banking sector and prospects for systemic support; however, in June it decided to keep the bank’s local currency deposit and issuer rating at “Ba1 with a stable outlook” citing the long-term focus of ACLEDA’s shareholders.

Completion may be delayed
Meanwhile, Prom Visoth, ACLEDA’s senior vice president and head of Legal and Corporate Affairs Division, said Sunday that the transfer of FMO’s shares to Jardines might not be complete until the end of January. The three parties involved were in the process of completing the necessary paperwork, he added.

An ACLEDA statement released Thursday said the deal will be completed by the end of the year.

Source: the phnom penh post

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JSH Asian Holdings, a group subsidiary, will purchase the stake from FMO, the international development bank of the Netherlands, in the first change of foreign ownership in

ACLEDA, the Kingdom’s second-largest lender. “Jardines brings ACLEDA more than 175 years of experience in commerce and banking in Asia,” ACLEDA Chairman Chea Sok said in a statement Thursday.

The Hong Kong-based firm will offer its new Cambodian partner expertise and business referrals, added ACLEDA Bank Vice President John Brinsden.

For Jardines – which has stakes in Asia Commercial Bank in Vietnam and merchant bank Rothschilds Continuation – the announcement of the transfer after approval by the National Bank of Cambodia ends years of negotiations in Phnom Penh.

“We believe ACLEDA offers significant growth potential in a country that has a bright future,” said Alain Cany, Jardine Matheson Vietnam group country chairman. “We are very much looking forward to being a supportive shareholder in the coming phase of its growth.”

Although the sum was not disclosed, FMO is believed to have made a substantial profit on its purchase nine years ago. Since then, the bank had injected regular capital through rights issues, said Brinsden, adding that FMO would continue to offer loan support and training. “We feel this is the right time for a major private investor such as Jardines to acquire our stake in ACLEDA,” FMO Chief Information Officer Jurgen Rigterink said in Thursday’s statement.

After completion of the deal, which was expected by the end of the year, Cany will replace FMO’s Joseph Hoess on the ACLEDA board of directors, although Hoess will remain on the ACLEDA Bank Lao Ltd board as vice chairman.

International Business Chamber Chairman Bretton Sciaroni said the deal was a sign that the Kingdom’s financial sector was maturing. “To have come to Cambodia at this point is a vote of confidence in Cambodia and ACLEDA,” he said Thursday. Jardine “made a very good choice”.

ACLEDA is thought to be one of the few banks in Cambodia to have weathered the financial storm that first hit the Kingdom a year ago, resulting in tight liquidity in the first quarter, plummeting profitability and concerns over rising numbers of bad loans across the sector.

The International Monetary Fund warned as recently as last week that the Cambodian financial sector remained at risk, particularly from underreported non-performing loans.

Nevertheless ACLEDA recorded a 72 percent rise in profits in the third quarter, compared to the previous period, as profits after tax jumped to US$2.32 million.

Source: the phnom penh post

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“Today, the banking industry is growing both in scope and operations, attracting large foreign banks to open, and the amount of deposits and loans have consistently increased – this reflects confidence from the public in this industry,” he said, encouraging banks to list on the long-awaited Cambodian stock exchange, according to the Phnom Penh Post.

The premier also said that Foreign exchange reserves had climbed 21.48 percent so far this year.

International Monetary Fund (IMF) data shows that reserves reached a record high of $2.594 billion in May after climbing steadily at the beginning of the year from $2.076 billion at the end of 2008, the Post quoted Hun Sen as saying.

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