[PHNOM PENH POST]
Growth was the watchword in the Kingdom’s banking sector last year, with
deposits, loans and profits – and the number of institutions –
climbing, insiders said yesterday.
A rebound in the Cambodian
economy following the global financial crisis had led to growth in
trade, the agriculture sector and the once-lagging construction
industry, which helped to boost the need for financing, they said.
“Our
economy performed very well, which led to the creation of new
businesses and demand for loans,” So Phonnary, executive vice-president
at ACLEDA Bank, said yesterday.
She also noted the growth in tourism and garment and textile exports as reasons for the sector’s strong year in 2011.
ACLEDA’s
total loans reached more than US$1 billion last year, up 34 per cent
from $744.4 million in 2010, according to So Phonnary.
At the
same time, deposits had totalled $1.47 billion in 2011, a more than 60
per cent increase from $911.2 million the year before, she said.
Profits
at the bank climbed to $43.7 million last year, compared to $26.4
million in 2010, So Phonnary said. The ratio of non-performing loans
fell to 0.23 per cent in 2011 from 0.5 per cent the year before.
ANZ
Royal Bank chief executive Stephen Higgins said via email that his
company had also generated a strong performance, with NPLs having fallen
to very low levels.
“2011 was a very good year for ANZ Royal,
with profit significantly up on 2010,” Higgins said, although he did not
disclose specific figures.
Han Peng Kwang, general manager of
HwangDBS Commercial Bank in Cambodia, said his firm’s total loans soared
180 per cent year-on-year to US$18.2 million. He attributed the
increase to overall business growth and a recovering real-estate sector.
“Our
loans grew significantly due to strong demand from the public for
business expansion and working capital, and also to purchase residential
houses,” Han said.
He did, however, note a decline in deposits
at HwangDBS in 2011. Total deposits fell 21 per cent to $10.4 million on
customer withdrawals, Han Penh Kwang said, but he did not offer reasons
for those withdrawals.
The increased banking activity last year
also attracted new banks to the country, bringing the total number of
commercial institutions to 33.
Bank of China and Industrial and
Commercial Bank of China, Mega International Commercial Bank and Taiwan
Co-operative Bank, from Taiwan, and the Military Commercial Joint Stock
Bank of Vietnam began operations in the Kingdom.
Insiders
yesterday disagreed on whether the Cambodian market could support such a
large number. ANZ Royal’s Higgins called for consolidation, but others
said there was still room for growth.
“I believe market pressure
is not so strong as to compel smaller banks to merge,” Hiroshi Suzuki,
CEO and chief economist at Business Research Institute for Cambodia,
said.
Despite the sector’s positive gains, the year wasn't
perfect for the Kingdom’s banks. ACLEDA suffered credit rating
downgrades from both Moody’s and Standard & Poor’s in September and
November respectively.
In September, Moody's changed its outlook for Cambodian Public Bank to “negative” from “stable”.
But
ACLEDA chief executive officer and president In Channy said yesterday
the bank would look to strengthen its position in 2011 through better
loan quality, higher profits, increased shareholder capital and a focus
on market niches.
The bank aimed to expand in underserved markets such as those in the rural provinces of the Kingdom, In Channy said.
He
did note that ACLEDA would be vulnerable to ratings downgrades if
Cambodia’s sovereign rating were also lowered, which S&P did last
year.
“The institutional strength [of ACLEDA] can be influenced
by the country’s sovereignty rating. We are subject to a decrease in
rating if the country rating also decreases,” In Channy said.
As for 2012, bankers saw different outcomes for the sector.
HwangDBS’s Han Peng Kwang said increased competition and uncertainties in the global economy would weigh on Cambodia.
ANZ Royal’s Higgins said he was optimistic that the industry would again deliver strong results.
“The outlook for the banking sector is still quite positive, reflecting the underlying strength of the economy,” he said.
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