The first overseas branch of Saigon-Hanoi Commercial Joint Stock Bank (SHB) will officially launch in Phnom Penh today in its first bid to tap neighbouring ASEAN economies.
It is the fifth Vietnamese bank and 34th commercial bank to compete in Cambodia’s banking sector.
Officials said that despite there being too many commercial banks for the small country, Cambodia’s financial sector still has more room to grow. Experts, however, expressed concern over apparent overcrowding.
The recent surge of bilateral trade and investments from Vietnam were the two main reasons Vietnamese banks continued to enter the Cambodian market, Tran Tu, commercial attaché for the Vietnam Trade Office in Phnom Penh, said yesterday, adding that BIDC and Sacom Bank had already found success here.
“All businessmen need to borrow money for business and project development and make any payments by the banks,” he said.
SHB’s business strategy included becoming a strong financial holding group in the region by 2015, SHB CEO Nguy?n V?n Lê said.
Yang Chanthy, the human resource manager of Sacom Bank, which in November 2009 became the first Vietnamese bank in Cambodia, welcomed the new player to the industry regardless.
“We’re not concerned because we’ve already stood here for years. We have a lot of clients that already know about us,” he said.
“Right now, the industry is very competitive and has too many banks. But, with good services and a wide range of products, we can provide to our customers,” he said.
Chheng Kimlong, a lecturer of economics and business at the University of Cambodia, said the recent surge of commercial banks in the Kingdom’s small economy surpasses the total demands from the industry.
“I am afraid that in the next four or five years, the industry will be in trouble as some banks go bankrupt and others pull out after they make a quick profit from us, thereby giving a negative image of our industry,” he said.
“The NBC [National Bank of Cambodia] should have clear regulations to govern them.”
He added that the situation would likely improve in the medium to long term as Cambodia’s economy continues to grow.
“Later on, when the biggest ones come in, there will be some merging so that there is just the right number of branches.”
SHB was first established in 1993, and has grown to include a chartered capital of 4.82 billion dong (US$229.28 million) and total assets of 70.97 billion dong ($3.38 billion), with a head office in Hanoi and nearly 200 branches and sub-branches in 25 provinces and cities throughout Vietnam, according to its press release.