Japanese bank to sign cooperation deal with Cambodian bank

Xinhua | 2012-8-23

Sumitomo Mitsui Banking Corporation, one of the leading banks in Japan, will sign a memorandum of understanding with Cambodia's leading Acleda Bank on Friday for business cooperation, according to a press release from Acleda on Thursday.

Under the agreement, both banks will provide mutual support for their respective clients, in addition to their economic cooperation in such activities as loans, deposits, money transfer, cash management, and other trade finance services, said the press release.

Moody’s to review Cambodia's banks for downgrades

Friday, 20 April 2012
Don Weinland
The Phnom Penh Post

Moody's Investor Services will review ACLEDA Bank and Cambodian Public Bank (Campu Bank) for potential downgrades, according to a release from the rating agency on Wednesday.

But the move comes primarily as a response to the global financial crisis and the rating agency’s attempt to realign sovereign ratings with that of banks, an official at Moody’s said.

The reviews and potential downgrades could be the final rating action in response to Moody’s policy change, Singapore-based analyst Christian de Guzman said by email yesterday.

Moody’s will review ACLEDA’s and Campu’s “bank financial strength rating”, both of which stand at a D, according to a statement issued late on Tuesday.

Cambodia's 'Aw, Shucks' Banker

In Channy's not-always-humble ACLEDA dominates the countryside.

08.08.11
Simon Montlake
Forbes (Asia Edition)

Many entrepreneurs develop a head for numbers in their teens. For In Channy, a 14-year-old city kid evacuated at gunpoint in April 1975 to labor in Cambodia's infamous Killing Fields, the only numbers that mattered were the 320 cows assigned to him. Losing a cow meant trouble. And under the Khmer Rouge regime, you didn't want any trouble.

Fortunately for Cambodia's stirring financial- services sector, Channy kept his nose clean. In 1981 he fled to a refugee camp in Thailand, where he became a teacher and won a scholarship to study business at a U.S. college. It would be another decade before he returned home. Today the former cowherd is president and CEO of ACLEDA Bank, Cambodia's largest bank, which he cofounded in 1993 as a nonprofit microfinance lender making $10 loans to demobilized soldiers.

Last year ACLEDA (Association of Cambodian Local Economic Development Agencies) reported net profit of $24.3 million, a sharp rebound from recession-hit 2009, and is on track for another bumper year: First-half net was $21.7 million, 130% higher than the year earlier. Foreign banks are starting to wake up to Cambodia's potential. Malaysia's CIMB and Maybank have opened branches and are said to be seeking acquisitions. ANZ Bank has a head start with its joint venture with Royal Group, while the Pung family-owned Canadia Bank, the second-largest lender, is courting strategic investors for a 30% stake.

Cambodia's ATM networks grow despite crisis

PHNOM PENH, Feb. 16 (Xinhua) -- Despite concerns over the impact of the global credit crunch on local financial institutions, Cambodian banks are expanding their network of ATMs to provide customers with easier access to their money, national media reported Monday.

In Channy, president and chief executive of ACLEDA Bank, told the Phnom Penh Post that the growth of ATMs has boomed in the last few years as living conditions improve and greater progress is made in modernizing the kingdom's bank sector.

"In 2007, (we) had 20 ATMs. Now, we have 60 ATMs with plans to reach 100 by the end of this year," In Channy said.

"Our ATMs have been installed in all parts of Cambodia," he said.

"Our long term expansion strategy will include an expansion of our network to 500 ATMs and 240 branch offices nationwide," he added.

Meanwhile, Kunkanel Nong, a marketing manager at the Canadia Bank, said that Canadia currently operates 48 ATMs throughout Cambodia, up from 25 in 2007, and that the bank expects to reach 60 ATMs by the end of this year.

The first ATM in Cambodia was introduced by Canadia Bank in June 2004, according to the National Bank of Cambodia's (NBC) 2007annual report.

Robbers outside Cambodian bank net 50,000 dollars, police say

Tue, 07 Oct 2008
DPA

Phnom Penh - Armed robbers committed a brazen afternoon stickup outside a bank and made off with an estimated 50,000 dollars, in one of the biggest robberies of its kind in the country's history, police said Tuesday. A Daun Penh district police source said the thieves took the cash at gunpoint in broad daylight at around lunchtime as the customer left Acleda Bank, a major bank in the Cambodian capital.

Last year, members of an Indonesian-led ring were jailed for robbing wealthy-looking bank clients by flattening their car tyres and following them until they were forced to get out of the vehicle.

But police said the haul in Tuesday's robbery exceeded any of those, and was not believed to be linked. The robbers remained at large.

Cambodia to Open Bourse in 2009; Urges Corporate Transparency

By Netty Ismail and Yoolim Lee

July 24 (Bloomberg) -- Cambodia plans to open its first stock exchange and start a corporate bond market in the fourth quarter of 2009 in a bid to attract foreign funds to Southeast Asia's second-poorest nation, a government official said.

Six to 10 companies, with a combined market value of $200 million to $400 million, including Sokimex Group, the country's biggest petroleum company, and Acleda Bank Plc, its largest bank, will likely be listed on the exchange within a year of it being set up, Kao Thach, head of the Ministry of Economy and Finance's financial market division, said late yesterday.

Cambodia, which abolished money under the Khmer Rouge three decades ago, is seeking to lure foreign funds as economic growth slows after peaking at 13.5 percent in 2005. The government will need to improve the legal system and urge Cambodian companies to open their accounting records to investor scrutiny, said Agost Benard, who covers the country for Standard & Poor's.

``Given all the uncertainties and lack of transparency, at least initially, it will probably be the local people who are willing to take the punt,'' said Benard, associate director at the rating company in Singapore. ``International investors who expect higher standards of disclosure and transparency will take a wait-and-see attitude.''

The government last year asked more than 400 companies, most of which are family businesses, to get their financial statements audited to improve transparency, Thach, 34, said in an interview in Phnom Penh.

Local Rules

``Cambodia has been effectively cut off from the rest of the developed world for the past three decades, so a lot of business has been done based on unwritten local rules,'' said Marvin Yeo, co-founder of Frontier Investment & Development Partners in Phnom Penh.

Frontier Investment, a private-equity fund, is raising $250 million to put in the second-poorest of 10 Southeast Asian nations, and will cash out of some of its planned investments through listings on the exchange, Yeo said.

The listing requirements in Cambodia will likely be modeled on the Kosdaq, South Korea's second stock market that was set up 12 years ago for small- and medium-sized firms as well as venture start-ups, Thach said.

Companies seeking a Kosdaq listing need to be in business for at least three years with minimum paid-in capital of 500 million won ($495,417) and debt-to-equity ratio of less than 150 percent of the industry mean. Venture capital firms have less stringent requirements under the South Korean government's program to prop up smaller technology companies.

Raising Capital

South Korea's exchange is helping Cambodia set up its bourse. The Cambodian government, which will likely own at least 51 percent of the planned venture, and the operator of the Seoul-based bourse, Korea Exchange Inc., will begin discussions next month to decide on their shareholdings, Thach said.

The Cambodia Securities and Exchange Commission will likely be set up as early as September, Thach said.

``They're nowhere near getting the rules together, the criteria for listing, transparency, proper accounting,'' said John Brinsden, vice chairman of Acleda Bank, the largest Cambodian bank with 209 branches in 24 provinces.

Acleda Bank will ``need a lot of capital over the next few years'' as it opens more offices in Cambodia and neighboring countries including Laos, Brinsden said in Phnom Penh.

Sokimex, which has monopoly rights to ticket sales at the Angkor Wat ancient temple ruins in Siem Reap, plans to expand its hotel and resorts business, Chief Executive Officer Sok Kong said on the company's Web site.

Transparency Concerns

Other Cambodian companies considering initial public offerings include Canadia Bank Plc, Union Commercial Bank Plc and Mong Rithy Group, which has palm oil plantations in Sihanoukville, Thach said.

Royal Group, which owns the country's biggest mobile-phone operator and has a partnership with Australia & New Zealand Banking Group Ltd. in Cambodia, will consider a listing ``in the future,'' Chairman Kith Meng said in an interview in Phnom Penh.

Companies can sell shares or bonds in Cambodia's currency, the riel, or the dollar, which will mitigate any foreign exchange risk for international investors, Thach said.

Still, ``the biggest concern would be the credibility of the companies or their reporting standards,'' said Frontier Investment's Yeo. Transparency International, a private monitoring agency based in Berlin, ranked Cambodia 162nd of 179 countries in its annual report on perceptions of corruption last year.

To contact the reporter on this story: Netty Ismail in Singapore
nismail3@bloomberg.net.

ACLEDA opens first Laos branch

Tuesday, 08 July 2008
Chun Sophal
The Mekong Times

ACLEDA Bank – the largest Cambodian bank – is today opening its first branch in neighboring Laos, the first step in its bid to start business operations internationally, said ACLEDA’s Executive Director In Channy.

“We hope to benefit from the potential advantages by opening the branch because Laos has a good growth market, similar to that in Cambodia,” he said. “Laos’ economic potential for ACLEDA Bank is first-rate – not the usual. We plan to open three branches in Laos in 2008.”

The three new branches are set to cost US$10 million and employ 12 Cambodians and 80 Laotians.

Economic analysts predict ACLEDA’s expansion into Laos will help the bank lead Cambodian investment abroad.

Chan Sophal, president of the Cambodian Economic Association, called the move “a source of pride for Cambodia,” saying it indicated a healthy Cambodian banking sector. “We think that it … will build more confidence in the sector which is essential for economic development,” he said.

ACLEDA, currently holding capital of over US$50 million, is looking to open branches across the Asean bloc and in other countries in the Greater Mekong Sub-region, In Channy said.

“Now, our long-term plan is to transform ACLEDA Bank into a regional bank, not just remain as a local bank. We will continue to expand with branches in China and Vietnam,” he said.

Chan Sophal warned that Cambodian banks should not be attempting to open branches in other countries in the region other than Lao and Burma, as the other countries have stronger growth potential than in Cambodia. “ACLEDA may go to China and Vietnam, but the transaction situation may not be easy as in Laos,” he said.

Bank Rating Promising for Financial Sector

By Sok Khemara, VOA Khmer
Washington
14 January 2008

Standard & Poor’s gave its first bank credit rating to a Cambodian bank last week, in a positive sign for Cambodia’s growing economy, though the country’s banks need to develop further.

The rating of B+/B for Acleda Bank, Cambodia’s third largest bank and largest micro-creditor, was still below investment grade, the Associated Press reported.

Channy Ung, director of the bank, said Monday the bank had the expertise to avoid fake money, a more pervasive problem in the past.

People should deal with businesses within the banking system to avoid fraud, he said, as a guest on “Hello VOA.”

Meanwhile, some people are concerned instability could lead to the collapse of banks.

Channy Ang said Acleda has insurance against such a scenario.

Cambodia-based Acleda Bank assigned 'B+/B' CCR with stable outlook - S&P

01.10.08

BANGALORE (Thomson Financial) - Standard & Poor's Ratings Services said it assigned its 'B+/B' counterparty credit ratings (CCR) to Cambodia-based Acleda Bank PLC with a stable outlook, citing the bank's adequate balance sheet strength and satisfactory asset quality.

The agency also assigned its 'D' bank fundamental strength rating on the bank.

S&P said it believes that the bank's asset quality on a long-run steady state basis might be weaker than that indicated by the current very low reported NPA levels due to portfolio seasoning.

An upgrade will hinge upon its ability to maintain good asset quality upon stabilization of its loan portfolio and improvement in core profitability through greater income diversity and an upgrade in Cambodia's sovereign rating, the agency said.

S&P said, however, substantial asset quality slippage from rapid loans growth or major economic deterioration will pose downward pressure on the ratings.

Acleda to start up in Laos

By Susan Postlewaite
Phnom Penh Post, Issue 16 / 26, December 28, 2007 - January 10, 2008

Acleda Bank delivered a New Year's surprise Thursday, announcing it obtained permission from the government of Laos to open a commercial bank there in 2008.

Officials of Acleda called the expansion to Laos just the first of a regional expansion. Investment in other countries is likely to come.

Lao PDR has one of the most underdeveloped economies in Asia, but like Cambodia, its finance and banking sector is developing and it is working with help from the Korea Exchange to set up a stock market. The stock market is expected to open in 2010, a year after Cambodia's stock market, with state run companies listing.

In Channy, Acleda Bank president and CEO, said the banking market in Laos is smaller than Cambodia with less competition.

"Most commercial banks are operating in the capital city, Vientiane, and they are now starting expansion to the provinces."

Channy called the expansion the result of a three-year strategic plan he presented to the Board of Directors in 2005 to build Acleda into a regional player. He said Acleda is studying the possibility of entering Vietnam and China, as well as other Asian markets.

He said the Lao bank will use the same retail banking models, including electronic banking services and online MIS platforms, that were developed for Cambodia.

Vann Saroeun, who will manage Acleda Bank Lao Ltd., said plans are to expand to the provinces as soon as possible starting with Sovannakhet and Pakse.

Saroeun managed Acleda operations in Siem Reap and Uddar Meancheay since 1993.

He said the microfinance industry in Laos is dominated by development funds in the north.

"There is only one microfinance bank but there are many many development funds. We have a different target."

The bank will begin operations at the beginning of June, said Saroeun. He said recruitment will begin in January for a staff of about 80.

"It's a very long process. We have to advertise by radio and tv and newspapers." Saroeun has taken a crash course in the Lao language.

Acleda, which now has $450 million in assets, started operations as a microfinance NGO in 1993 making loans to the poor.

Paid up captial for the Laos bank is $10.5 million.

Insurance for bank deposits now available

Phnom Penh Post, Issue 16 / 05, March 9 - 22, 2007

Pascal Brandt-Gagnon is general manager of Asia Insurance (Cambodia). In January 2006 Asia Insurance became the first and only company in Cambodia to offer Bankers Blanket Bond (BBB) insurance. In January, Acleda, Cambodia's leading micro-finance bank, purchased BBB insurance and saw deposits increase dramatically in the ensuing weeks. Brandt-Gagnon spoke to Cat Barton about Cambodia's anti-insurance mentality, the lack of public confidence in the banking sector, and the impact of introducing BBB insurance to the country.

What is a Bankers Blanket Bond?

Bankers Blanket Bond - BBB - is essentially an all risk policy. It protects the bank from crimes such as fraud, embezzlement, all kinds of losses relating to cash, and deposits.

What kinds of risk are we talking about?

When you talk of bank insurance, you are talking about interior risks, for example fraud, and exterior risks, for example electronic theft [which is when hackers intercept electronic bank transfers and divert the money to a different account.]

Do Cambodians have much faith in the banking and insurance sectors?

In Cambodia, there is historically very little confidence in the banking sector, but this is slowly changing. The reasons for that are varied. And confidence in the banking industry and the insurance industry go hand in hand.

How can Asia Insurance (Cambodia) provide BBB?

When you talk about BBB you are talking about a very specific type of insurance, where claims can run into the millions, so you need a specialized market to reinsure this sort of risk, such as the London market. With BBBs, the majority of risk is reinsured. All insurance companies in Cambodia must have deposits of at least four million [dollars] but with that you can't take a fifty million dollar hit on a claim: that's why it must be reinsured.

What message is a bank sending out when it buys BBB?

The bank has made a definite statement about their transparency and quality of governance. Also, it is a statement to their customers and depositors that they are protected against internal and external risks. A bank that buys BBB makes a statement and sets an example; they want to protect you. They are saying, "Look, if something does happen, God forbid, then we have invested in an insurance security for you."

Acleda deposits went up after they announced they had bought BBB. Is this to be expected?

Yes, I am not surprised. Acleda has created a good name for itself: through the services it offers, its internal governance, its success. This latest statement was saying, "We are not just here to do business, we care about protecting your assets." This speaks volumes about what kind of an institution you are. It is a very strong, positive statement.

How will the ability to offer BBB impact on the insurance industry in Cambodia?

It gives the industry, and the company underwriting the risk, credibility. It shows that even though this is still a small market in its infancy we are able to deal with complex risks. It shows we can quantify and analyze complex risk and provide insurance and reinsurance.

There is not much of an insurance mentality in Cambodia. There is no legislative framework to force insurance on people. But with insurance, the idea is not just to make money or get more premiums: insurance is a financial security. It's about protection.

The best example is life insurance: if something should happen to you then at least your relatives will receive some form of financial assistance.

The mentality here is not to have insurance, but that is slowly changing. Now many people do and the market has grown - from four million dollars in 2002 to eleven million dollars today. However, the potential market is still more.

BBB can help people to think of Asia Insurance as a reliable and serious company. However, the impact on the insurance industry will take much longer to be felt [than on the banking sector].

Do you think more banks will purchase BBB insurance?

If Acleda deposits go up as a result of their acquiring BBB then the money is coming from somewhere - either from out under pillows, or from other banks. This could encourage other banks to follow their example.