Bank no. 33 sets up shop

The Kingdom’s crowded banking sector yesterday welcomed its latest entrant, Vietnam’s Military Commercial Joint-Stock Bank, the fourth Vietnamese bank to set up operations in Cambodia.

Military Bank has registered US$39 million in start-up capital with the National Bank of Cambodia, which requires commercial banks to hold at least $37.5 million in reserve.

It plans to disburse $200 million in loans during the next 12 months.

“We think Cambodia’s environment is very good, and there is still room for expansion,” CEO Le Cong said yesterday at Military Bank’s launch ceremony at the Phnom Penh Tower. 

MB’s arrival means the number of commercial banks in the Kingdom has reached 33. Five have opened branches in Phnom Penh this year alone.

Insiders’ reactions to the industry’s continued expansion yesterday were mixed.

The outlook ranged largely between the increased competition for a still-limited market and the benefits that come as more mature players spur growth in Cambodia’s financial sector. 

“We already have too many competitors in the banking and financial business, and it’s getting tougher and tougher,” Kookmin Bank Cambodia CEO and president Jang Ki-Sung said yesterday. Kookmin is South Korean-owned.

Jang said the focus for Cambodia’s commercial banks and the NBC should be to allow the banks presently doing business in the Kingdom to increase their market share, especially given that the market was far from developed. 

“The number of customers of each bank and the overall financial share are still small compared to [Cambodia’s] gross domestic product,” he said, adding that banks had plenty of room to grow.

Other experts noted the key role international companies play in boosting Cambodia’s banking operations.

Business Research Institute for Cambodia CEO and chief economist Hiroshi Suzuki pointed to the GDP growth as a result of the loans these banks issue, in addition to deposits and loans increasing by 20 to 30 per cent a year. The banks also attracted more foreign investment, he said.

Suzuki said more mature international institutions provided much-needed investment data to companies and funds interested in Cambodia, as the Kingdom’s own data was often incomplete or non-existent. 

“The banks are not only providing a source of money, but also good information, which is very important for business overall,” he said. 

Bank of China and Industrial and Commercial Bank of China, which both opened in Cambodia this year, would deliver key financial information to that country’s investors, he said.

Source: PPP

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World Bank eyes lake fight

The World Bank says it is “closely monitoring” resettlement negotiations regarding the capital’s Boeung Kak lake after issuing a warning to the government on the issue earlier this year, though it does not appear to have taken a more active role in the dispute. In March, the Bank released an internal report on a land titling project it conducted in cooperation with the government from 2002 to 2009 known as the Cambodia Land Management and Administration Project, or LMAP.  The US$28.8 million initiative did succeed in issuing land titles to roughly 1.2 million Cambodians. The bank’s inspection panel concluded, however, that mismanagement and a lack of monitoring during the project had deprived thousands of people at Boeung Kak lake and elsewhere of the opportunity to secure their claims on their land, instead leaving them increasingly vulnerable to forced eviction. More than 20,000 lakeside residents may ultimately be displaced by a development run jointly by a Chinese company and a ruling party senator, receiving meagre compensation in what will likely be the largest forced relocation in the capital since the Khmer Rouge era. At the time of the report’s release in March, the bank said a failure by the government to provide for adequate resettlement in the case would have broader consequences for the organisation’s involvement in Cambodia, and that bank staff would report back to the their board of directors on the issue within 60 days. “If there is [a] continued lack of willingness to cooperate on addressing the [Boeung Kak lake] resettlement issue, management would anticipate reviewing all current and proposed support to the government in the land sector and carefully take into account the government’s position in considering the magnitude and focus of future bank support to Cambodia,” the bank said.

On Monday, with that 60-day period having lapsed, the bank said representatives of the Boeung Kak residents and the municipality “have informed us they are currently negotiating to try and reach an agreement to provide an on-site housing option for the remaining residents”, although no agreement has yet been reached. “We are encouraging the parties to reach a resolution and in the interim will be closely monitoring the progress of negotiations,” the bank said, adding that the Cambodian government “has told the World Bank it is taking a number of steps to improve resettlement processes more generally in Cambodia”. Such improvements were hardly evident last month, as police broke up a protest by Boeung Kak residents in violent fashion, arresting 11 people including two children. At the time, the Cambodian Centre for Human Rights said the incident illustrated “that the rights to freedom of assembly and expression of ordinary Cambodians [are] secondary to the business operations of the wealthy and well-connected”. The World Bank is a substantial donor to the Kingdom – now funding projects worth more than $483.5 million –  and rights groups said it could provide much-needed leverage in the ongoing negotiations between lakeside residents and City Hall. “It is important at this stage that the bank is making it crystal clear to the Cambodian government that there will be no more business as usual until the Boeung Kak issue is resolved in accordance with Cambodia's contractual obligations to the bank and the rights of the residents,” David Pred, executive director of Bridges Across Borders Cambodia, said in an email yesterday. However, the bank’s management noted in response to the report earlier this year that dialogue on these issues  with the government had “deteriorated", and the organisation may face difficulty rekindling such talks.  “The World Bank is not involved in our project to develop the Boeung Kak area and has no power to order us,” Koet Chhe, deputy chief of the city's administration office, said yesterday.  according to ppp

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Maybank opens 10th branch in Cambodia

Maybank today opened its 10th branch in Kampung Cham, Cambodia, as part of its regional business growth plan to expand the group's network in Cambodia.
The new branch will provide deposits, mortgage financing, working capital & trade financing, credit card encashment, ATM facilities and remittances.
Maybank would open another branch in Cambodia, which will bring the number of branches in teh country, to 11 by year-end, it said in a statement today.
According to btimes.com.my

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Microfinance grows on agriculture loans

The microfinance sector saw increased demand for loans particularly from small and medium enterprises and the agricultural sector during the first quarter of the year, according to industry insiders.
Domestic microfinance lending, excluding ACLEDA Bank, totalled US$473.4 million at the end of the first quarter, a 51.4-percent increase from the end of the fourth quarter last year, according to statistics from the Cambodian Microfinance Association obtained yesterday. The number of borrowers climbed 14.4 percent to 988,428.
“We are improving because the economy is as well, especially with the increase of new businesses in the provinces and the strength in agriculture,” said Chea Phalarin, Chairman of the CMA and President of Amret Microfinance.
Chea Phalarin said the country’s microfinance institutions have grown their operations at the grassroots level by offering competitive services and products to customers, such as the attractive interest rate on deposits given by five MFIs recently licenced by the National Bank of Cambodia.
“Our interest rate is higher compared to commercial banks. It’s a better service that helps to bring in more customers,” he said.
Deposits at the licenced MFIs climbed 26.8 percent during the quarter to total $52 million on March 31, the report said, while the number of depositors rose 9 percent to 207,137. The CMA also noted a decrease in the overall non-performing loan (NPL) rate during the period.
Amret’s loans and deposits both rose by 30 percent quarter on quarter, reaching $70.9 million and $19.9 million respectively, while its non-performing-loan rate improved to 0.3 percent, according to its president.
“We attained our loan-growth plan in [the first quarter] of this year, and we expect it will keep growing in [the second quarter],” said Chea Phalarin.
Sim Senacheert, Chief Executive Officer of Prasac MFI, said that his portfolio of loans outstanding rose 11 percent by the end of March, reaching $117.9 million, thanks to a demand bump in business loans and more large loans for small and medium-sized enterprises.
Prasac’s NPL rate fell to 0.9 percent from 1.02 percent quarter on quarter, down from 1.63 percent in Q1 of 2010.
“It improved because the clients have money to back their loans,” Sim Senacheert said. “And most of the lenders were cautious in their lending activities, which reduced clients’ debt loads.”
He said he expected Prasac’s loan portfolio to grow 40 percent to 50 percent in 2011, a figure that CMA Chairman Chea Phalarin cited for the entire MFI industry.
“I think that the whole industry performed very well in the first quarter of 2011, and this good performance will continue for the whole year,” he said.
Hiroshi Suzuki, an economist at the Business Research Institute for Cambodia, said the Prime Minister’s goal of exporting 1 million tonnes of rice by 2015 has had a positive effect on the Kingdom’s agriculture industry.
“It is good for the private sector to follow the government policy,” he said, adding that the demand for financing would continue to be strong at this initial stage of development for Cambodia’s economy.
He said he is optimistic about the growth of Cambodia’s financial sector over the next few years, as loan terms get longer and interest rates drop.


According to PPP. 29 April 2011

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ACLEDA Bank credit officer faces charge

A credit officer from ACLEDA Bank has been charged with breach of trust in Kandal province following his arrest on Sunday, police said.
Eav Chamrouen, chief of the Kandal provincial police, said yesterday that the suspect – 28-year-old Oum Chea Socheat – remained in police custody and that the case had been forwarded to the Kandal provincial court. “I sent the suspect … to the court already and the case is out of the hands of the police,” Eav Chamroeun said.
Sin Chen, director of ACLEDA’s Kandal provincial branch, said the bank was still investigating the case and was unsure of how much money had allegedly been lost at the hands of Oum Chea Socheat. Prom Visoth, head of legal and corporate affairs for ACLEDA, said the bank was in the process of reviewing documents related to Oum Chea Socheat’s work.
“I don’t know about the amount of money that Oum Chea Socheat took from the bank because we are still checking the documents,” he said.
A local media outlet reported this week that ACLEDA had been taken for more than US$200,000 in the alleged scheme, though Prom Visoth said he did not know where that figure had come from.
ACLEDA president In Channy declined to comment on the case yesterday.


According to PPP

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Talking Finance: Understanding bank lending

Firms around the world depend on several sources of capital to finance their businesses. The stock market provides long-term equity financing, the bond markets provides debt financing, and the bank market provides loans. Cambodia will soon have an equity and bond market, but historically, businesses have been financed through owner’s equity and bank borrowing.
Thus banks play an extremely vital role given the absence of alternatives. Understanding how banks evaluate loans and their decision-making process is extremely helpful for potential borrowers. Banks strongly prefer companies with an operating history and with several years of profitability. Therefore obtaining financing as a start-up company may be difficult. The bank will have lending policies based on the local market regulations and the bank’s own rules and procedures.
Lending to certain industries may be restricted for reasons such as the impact to the environment or for moral reasons. Banks will also diversify their lending portfolio by applying lending limits per industry. Local regulations must be adhered to. For example, a bank may only lend 20 percent of its capital to a single borrower, this being known as the single borrower lending limit.
Cambodia’s lending rates have improved over the last decade, yet interest rates are still perceived as higher than international market rates. How a bank prices a loan is based on several factors. The “cost of funds” is generally what a bank has to pay its depositors. This is greatly influenced by supply and demand. If the market is flush with deposits, interest rates on deposits will be lower. They will also be lower if banks restrict lending as there is less need for deposits.
If banks are actively lending and require deposits, then rates on deposits will be higher. Lending costs are also influenced by the banks’ own operating costs and the risk on the borrower. Longer tenors are priced higher as the risk on long-term loans is greater than short-term loans.
An unprepared borrower is normally its greatest enemy. There must be a clear purpose for the loan, and the uses of the requested borrowing amount must be coherently explained and verified if possible.
How the loan will be repaid and in what timeframe must be substantiated. The character of the borrower is a very important aspect of the lending decision. The history of the owners and management will weigh heavily. The competitive position of the borrower in its industry is another key determinant.
Cambodian banks, almost without exception, lend on a secured basis. Thus the value and quality of collateral pledged influences the amount the bank will lend.
Policies of banks vary. Occupied land may be given a collateral value of 50 percent of its market, building 40 percent, and vacant land less. Land and building are immovable collateral and strongly preferred.
The loan documents will include covenants. Affirmative covenants require the borrower to take certain actions, such as filing of financial statements and maintaining insurance. Negative covenants restrict the borrower from doing certain things such as taking on additional debt. These should be reviewed with scrutiny as they can lead to events of default which allow lenders to demand repayment in advance of the due date of the loan.
The complexities of obtaining a loan and satisfying the bank’s requirements are demanding. A well prepared borrower will be in a much better position.

According to PPP

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Sokha inks BIDC loan

A security guard drives past scaffolding that was put in place to prevent landslides at Bokor Mountain, the future site of a Sokha hotel.

Three Sokha Hotels now under construction in the Kingdom were financed by a loan from Vietnam-owned BIDC bank, Sohka Hotel Company Chief Executive Officer Sok Vanna said yesterday.

The firm has received the capital, and is using it to finance Sokha’s Bokor resort in Kampot province, as well as the Sokha Phnom Penh Hotel on the Chruoy Changvar peninsula and a beachside hotel in Preah Sihanouk province, he said.

“We had already received the agreed-upon loan, and begun implementing our projects, but we waited to sign the official agreement during the visit of the Vietnamese Prime Minister to the Kingdom,” he said.
The loan agreement was signed by BIDC CEO Nguyen Van Hien and Sok Vanna on Sunday, during a visit by Vietnam’s Prime Minister Nguyen Tan Dung to Phnom Penh. Sok Vanna declined to reveal the size of the loan yesterday.
The three projects are at different stages of development. Five stories of the 16-storey, 799-room Sokha Hotel Phnom Penh are built, and is set for a 2014 completion, he said.
Work on the 700-room, 18-storey Sokha Bokor Hotel located on Bokor Mountain next to a historic casino is continuing, though no completion date has been set.
The 9-storey, 600-room Sokha O’Chheuteal Hotel is expected to be completed in 2012 in Sihanoukville.
“Cambodia has lots of areas that will attract international tourists to come,” he said.
The firm currently operates three Sokha hotels in Cambodia.
Ministry of Tourism Industry Department Director Prak Chan Dara said yesterday that the Kingdom has seen many hotels being built in recent years.
“We will have a lot of five star hotels in our country and we think that it is a good sign for the tourism sector,” he said.

According to PPP

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Banks claim growth in lending and deposits

Increased lending from the Kingdom’s 30 commercial banks during the first quarter was largely due to increased demand from the domestic agriculture sector, according to National Bank of Cambodia Director General and Spokeswoman Nguon Sokha.
Lending at the end of March totalled US$3.467 billion, a 4.33 percent increase on $3.323 billion extended by Cambodia’s banks on December 31, 2010, she said.
“We see that our commercial banks are increasing loans and deposits after the crisis,” said Ngoun Sokha, adding new lending “is mainly focusing on the agricultural sector, which has greatly increased compared to other [sectors] and business activities.
“The banking sector has improved in line with the whole economy, resulting in more loan accessibility,” she said.
Lending to the construction and real estate sector has languished behind other sectors, she noted.
Nguon Sokha also pointed to an increase in deposits, which totalled $4.001 billion at the end of March, a 3.23 percent rise from $3.876 billion at the end of December last year.
Canadia Bank Vice President Dieter Billmeier wrote that the bank’s total lending increase 37.74 percent during the first quarter to $562 million by the end of March, while deposits increase 41.12 percent to $948 million.
“The economy and business in Cambodia is growing again with a remarkable pace,” he said.
“As far as our loan portfolio is concerned we have a special focus on agriculture and food processing activities nation-wide. But in general we are serving all other sectors and industries.”
He predicted Canadia Bank and the rest of the banking sector would have a strong 2011.
Foreign Trade Bank of Cambodia saw its total deposits grow by 29 percent during the quarter to $296 million, and gross loans and advances increase by 38 percent during the quarter to $145 million at March 31, according to its unaudited figures.
“Our loans are mainly granted to service industry, agriculture and micro-finance institutions,” said Gui Anvanith, general manager and board member.
“We have increased our exposure to the agribusiness sector since we believe that this sector will continue to experience sustainable growth in light of better access to international markets as well as stronger government support,” he said.
Kookmin Bank Cambodia President and Chief Executive Officer Jang Ki-sung said the number and amount of its loans increased by 100 percent and 112.6 percent respectively during the quarter. Kookmin launched its first branch in the Kingdom in 2009.
South Korea-based Hwang DBS Commercial Bank, which began operation in July 2009, has seen number of deposits grow to 1,191 and 154 loans customers as of 31 March 2011.
“This growth was complimented by our ability to reach out to more customers in the housing loan and SME sectors ...,” wrote Hwang DBS General Manger Han Peng Kwang. He added the bank had expanded its domestic reach by adding two more branches last year.
Ngoun Sokha said she expects the domestic banking sector to have a strong 2011.
“Relying on our surveys as well as the economic climate in the region and the world, we are in a very favourable environment to make our whole economy better.”
“It will require more loans, to meet the economy’s needs,” she said.

According to PPP

Related to Post

• Advanced Bank of Asia (ABA)

• ANZ Royal Bank

• Banks claim growth in lending and deposits

• Talking Finance: Understanding bank lending

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Sokha inks BIDC loan

Three Sokha Hotels now under construction in the Kingdom were financed by a loan from Vietnam-owned BIDC bank, Sohka Hotel Company Chief Executive Officer Sok Vanna said yesterday.
The firm has received the capital, and is using it to finance Sokha’s Bokor resort in Kampot province, as well as the Sokha Phnom Penh Hotel on the Chruoy Changvar peninsula and a beachside hotel in Preah Sihanouk province, he said.
“We had already received the agreed-upon loan, and begun implementing our projects, but we waited to sign the official agreement during the visit of the Vietnamese Prime Minister to the Kingdom,” he said.
The loan agreement was signed by BIDC CEO Nguyen Van Hien and Sok Vanna on Sunday, during a visit by Vietnam’s Prime Minister Nguyen Tan Dung to Phnom Penh. Sok Vanna declined to reveal the size of the loan yesterday.
The three projects are at different stages of development. Five stories of the 16-storey, 799-room Sokha Hotel Phnom Penh are built, and is set for a 2014 completion, he said.
Work on the 700-room, 18-storey Sokha Bokor Hotel located on Bokor Mountain next to a historic casino is continuing, though no completion date has been set.
The 9-storey, 600-room Sokha O’Chheuteal Hotel is expected to be completed in 2012 in Sihanoukville.
“Cambodia has lots of areas that will attract international tourists to come,” he said.
The firm currently operates three Sokha hotels in Cambodia.
Ministry of Tourism Industry Department Director Prak Chan Dara said yesterday that the Kingdom has seen many hotels being built in recent years.
“We will have a lot of five star hotels in our country and we think that it is a good sign for the tourism sector,” he said.

According to PPP

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ANZ Royal Bank

ANZ Royal Bank is a joint venture with 55% owned by Australia and New Zealand Banking Group Limited (ANZ) and 45% by the Cambodia-based Royal Group of Companies (RGC).

Since its opening in September 2005, ANZ Royal Bank has opened 19 branches including 1 agency and placed more than 125 ATMs in Phnom Penh and key provinces. Until now, ANZ Royal Bank has opened around 82,000 customer accounts, employed over 500 staff and has the largest retail network of any ANZ Banking Group company outside of Australia and New Zealand.

In our commitment to provide you with convenience and superior customer service, ANZ Royal Bank proudly announces the opening of ANZ Royal Bank Toul Kork branch. Enjoy our full range of innovative business and banking solutions, and day and night ATM service that will make your life easy.

Please come and experience world-class banking at ANZ Royal Bank Toul Kork branch: #95, Kim Ilsong Boulevard (289), Sangkat Boeng Kak II, Khan Toul Kork, Phnom Penh, Cambodia.

For more information, please contact ANZ Royal Bank at 023 999 000.

ANZ Royal Bank

Head Office

20, Kramuon Sar &
Corner of street 67,

Phnom Penh 

www.anzroyal.com/en/Personal/

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Advanced Bank of Asia (ABA)

ABA Bank (Advanced Bank of Asia Limtied) was established in October 1996 operating as a commercial bank in The Kingdom of Cambodia.

ABA Bank is progressive and fast growing commercial bank in Cambodia that offers unique products and conditions for corporate and private clients. ABA Bank's principal activities are grant loans to individual and corporate borrowers, receive deposits, and provide other normal banking services.


Since the commencement of our incorporation in 1996, we have grown from strength to strength to become one of the most dynamic institutions in terms of banking and customer services.
The external level of service begins by identifying our customer needs and to respond more quickly and more satisfactorily. Such success translates into more loyal customers who are more willing to use our services and to prefer new business.
We have grown from a small banking institution with around 20 employees to 170 employees to meet the growing market demands.

In November 2009 ABA BANK introduced its new corporate brand identity. New corporate identity signals the bank's goals for growth and a desire to build upon its trusted brand in Financial Services Industry.

For further information:

Advanced Bank of Asia
97/99, Norodom Boulevard,
Sangkat Boeung Raing,
Khan Daun Penh,
Phnom Penh
T : (23) 720-434
F : (23) 720-435
www.ababank.com.kh


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Cambodia Banks

Acleda Bank

28, Mao Tse Tung Boulevard,
Sangkat Boeung Trabek, Phnom Penh
T : (23) 214-634
F : (23) 364-914
www.acledabank.com.kh

Advanced Bank of Asia
97/99, Norodom Boulevard,
Sangkat Boeung Raing,
Khan Daun Penh,
Phnom Penh
T : (23) 720-434
F : (23) 720-435



www.ababank.com.kh

First Commercial Bank
66, Norodom Boulevard,
Khan Daun Penh,
Phnom Penh
T : (23) 210-026
F : (23) 210-029

Krung Thai Bank
149, Street 215,
Sangkat Deipo 1 Market,
Khan Tuankok,
Phnom Penh
T : (23) 366-005
F : (23) 428-737
www.ktb.co.th

Union Commercial Bank
UCB Building,
61, Street 130,
Khan Daun Penh,
Phnom Penh
T : (23) 724-831
F : (23) 427-997
www.ucb.com.kh

ANZ Royal Bank

Head Office

20, Kramuon Sar &
Corner of street 67,

Phnom Penh 

www.anzroyal.com/en/Personal/

AMK Angkor Mikroheranhvatho Kampuchea 191-Block F, Phnom Penh Center, Corner Sihanouk & Sothearos Boulevards, Tonle Bassac, Chamkarmon, Phnom Penh T : (23) 993-062 F : (23) 221-650 E : info@amkcambodia.com www.amkcambodia.com	Cambodia Agriculture Industrial & Merchant Bank 87, Norodom Boulevard, Sangkat Boeung Raing, Khan Daun Penh, Phnom Penh T : (23) 218-667 F : (23) 217-751
Cambodia Asia Bank 252, Monivong Boulevard, Khan Daun Penh, Phnom Penh T : (23) 722-105 F : (23) 426-628 www.cab.com.kh	Cambodia Mekong Bank 1, Kramoun Sar Street, Sangkat Phsar Thmei 1, Khan Daun Penh, Phnom Penh T : (23) 217-112 F : (23) 217-122
Cambodian Commercial  Bank       26, Monivong Boulevard, Sangkat Phsar Thmei 2, Khan Daun Penh, Phnom Penh T : (23) 426-145 F : (23) 426-116 www.ccb-cambodia.com	Cambodian Public Bank Villa 23, RV Kramounsar, Sangkat Phsar Thmei 2, Khan Daun Penh, Phnom Penh T : (23) 426-067 F : (23) 426-068 www.campubank.com.kh
Maybank 2, Norodom Boulevard, Khan Daun Penh, Phnom Penh T : (23) 217-590 F : (23) 217-594 www.maybank2u.com.my	National Bank of Cambodia 22-24, Norodom Boulevard, Khan Daun Penh, Phnom Penh T : (23) 428-105 F : (23) 426-117 www.nbc.org.kh
Peng Heng SME Bank 74, Norodom Boulevard, Khan Daun Penh, Phnom Penh T : (23) 219-243 F : (23) 219-185	Rural Development Bank 5, Ang Eng & Ang Non Streets, Sangkat Wat Phnom, Khan Daun Penh, Phnom Penh T : (23) 982-434 www.rdb.com.kh
Singapore Banking Corporation 68, Samdech Pan Street, Sangkat Boeung Raing, Khan Daun Penh, Phnom Penh T : (23) 211-211 F : (23) 212-121 E : sbcbank@camnet.com.kh www.sbc-bank.com	Standard Chartered Bank Unit G-02, Mikasa Hotel Apartment, 313, Sisowath Quay, Phnom Penh T : (23) 212-729 F : (23) 212-731 www.standardchartered.com/kh

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Advanced Bank of Asia (ABA)

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Banks claim growth in lending and deposits

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