Hua Nan Commercial Bank plans to become the fourth Taiwanese bank to enter Cambodia’s crowded banking sector, hoping to capitalise on the Kingdom’s high number of Taiwanese investors and high interest rates.
The Taipei-based bank plans to have its own branch in Cambodia, the senior manager of the bank’s international banking department, Chris Lee, told the Post yesterday.
Cambodia has “many Taiwanese companies, especially in the shoe and garment industry”, he said. “Compared to other ASEAN countries, it also has high interest rates [on loans],” which are good for profits.
In September 2011, Taiwan’s Mega International Commercial Bank opened in Cambodia, followed by Taiwan Cooperative Bank in March this year. That same month, the Post also reported that Taiwan’s E Sun Commercial Bank planned to acquire a 70 per cent stake in Cambodia’s Union Commercial Bank for nearly $70 million.
With 32 commercial banks currently in Cambodia, some larger banks had in earlier media reports called for consolidation to remove smaller players, as they believe that with Cambodia’s relatively small population of about 14 million, the banking industry is saturated.
According to the director-general of National Bank of Cambodia (NBC), Nguon Sokha, “NBC does not stop issuing licences to new banks” as long as they bring value to the country.
But she said, “For the time being, we promote consolidation in the banking industry by encouraging new applicants to consider partnership with the existing local banks.”
“Some of the local banks want to strengthen [their business] so it might be the case that they look for partners in Taiwan or in any other countries which they think are suitable as their business partner,” she added.
While Nguon Sokha said she was not aware of Hua Nan’s plan, generally, “not only Taiwanese banks, but many other [banks from other countries] are eyeing Cambodia, mainly due to its good performance in the last decade, macroeconomic stability, and political stability,” she said.
Hua Nan is listed on the Taiwan Stock Exchange and has branches in London, New York, Singapore, Los Angeles and Hong Kong.
The bank, a subsidiary of state-run financial service provider Hua Nan Financial Holdings Co, posted a net profit of NT$2.45 billion (US$82.1 million), in the first quarter of this year, up 62 per cent from the same period in 2012, the Taipei Time yesterday reported Hua Nan Financial president Ed Liu as saying.