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ACLEDA Q3 lending up 9.6pc

Second-largest bank sees recovery in loan disbursements over previous three months, but signs of sluggish lending growth continue among rest of sector

CAMBODIA’S second-largest bank by loans reported a near 10 percent rise in new lending over the third quarter, but ACLEDA Bank President In Channy warned Friday the trend did not likely extend to the rest of the sector amid signs from other domestic banks that lending growth remained sluggish.

ACLEDA figures showing a 9.64 percent quarter-on-quarter increase in total disbursements to US$482.9 million at the end of September, up from $440.44 million at the end of June, followed a warning from the International Monetary Fund (IMF) that profitability in the sector remained at risk unless banks could begin to reintroduce a rapidly growing deposit base back into the economy through new lending.

In Channy said the increase – which followed a 2.16 percent drop in outstanding loans in the second quarter – was due to the bank’s extensive reach into the provinces through regional branches and borrowing growth ahead of the upcoming harvest season.

“I cannot foresee the whole banking industry copying our performance because smaller banks are finding it difficult to grow their loan disbursements, but for ACLEDA Bank the gains are a good sign after the number of loan issued dropped 2.16 percent in the second quarter [quarter on quarter],” he said.

In Channy said ACLEDA’s deposits grew 7.16 percent over the quarter to $653.7 million at the end of September. Non-performing loans (NPLs) dropped from 1.6 percent at the end of June to 1.3 percent at the end of September he said. The bank reported a 0.2 percent NPL ratio at the end of 2008.

The bank, which started as a microfinance lender, had 226 branches across the country at the end of last year, more than 200 more than the next largest, Canadia Bank, according to figures from the National Bank of Cambodia.

It is hard to say whether the banking industry as a whole is starting to recover.

In Channy predicted loan growth would accelerate further in the fourth quarter.
The Foreign Trade Bank of Cambodia (FTB) also saw an uptick in lending over the quarter, according to General Manager Gui Anvanith. He said the Kingdom’s sixth largest lender total lending grew 3 percent quarter on quarter to $103 million as of the end of September.

“However it is hard to say whether the banking industry as a whole is starting to recover because a number of potential customers have been … affected [by the economic downturn] and will recover soon, while some are in serious condition and are still suffering.”

He echoed concerns raised by the IMF’s mission to Cambodia last month that a lack of lending opportunities could eat into banking profits, adding that he did not expect a significant rise in potential lending at FTB for at least another year.

“I dare not predict how many more loans will be disbursed, but we will lend if we can find customers with promising proposals,” he said.

Deposits at the bank were stable at around $210 million at the end of the third quarter, he said, whereas end-of-2008 deposits were $219.9 million.

Cambodian Public Bank Phan Ying Tong declined to disclose third-quarter figures Friday, saying only that the period had been worse than the second in terms of the banking environment.

Alex Ng, general manager at the American-owned Angkor Capital Bank, which launched late last year, said Friday that both loans and deposits at the bank had grown rapidly in the previous quarter, although he did not disclose figures.

“Loan disbursements are growing consistently because we have been here for just one year,” he said. “Because our loan base started from very low, growth is much faster than for others,” he said.

He also predicted growth in new lending opportunities, but said it would be “a slow recovery”.

National Bank of Cambodia Director General Tal Nay Im could not be reached for comment Friday. The latest available data from the central bank shows outstanding loans in the banking sector at $2.35 billion as at the end of May, only slightly higher than the $2.33 billion recorded at the end of 2008. Loan disbursements at the end of May 2008 were just $1.51 billion, showing that credit grew rapidly over the latter half of the year before new lending ground to a halt in the wake of the global economic crisis.



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