ANOTHER big Taiwanese bank was eyeing Cambodia’s emerging financial sector, a National Bank of Cambodia official said yesterday.
The Mega International Commercial Bank had been in talks over recent months with the NBC about setting up operations in the Kingdom, NBC director-general and spokeswoman Nguon Sokha.
“It's a huge Taiwanese bank. They had come to observe Cambodia’s banking sector and expressed their desire to open a branch here,” she said.
The presence of large foreign banks tended to build confidence in the Kingdom’s financial sector, which benefited the industry as a whole, Nguon Sokha said.
“They will also bring new sources of capital to develop the economy, as well as new, high-tech banking solutions for Cambodia's banking development.”
In addition to its 108 branches in Taiwan, Mega Internat-ional operates 19 branches and three representative off-ices abroad, according to the company's website.
It also has wholly-owned bank subsidiaries in Thailand and Canada, bringing the number of its international locations to 31.
Mega also says it has an aggregate paid-in capital of US$2.22 billion.
Late last month, Taiwan’s Central News Agency reported that the Taiwan Co-operative Bank (TCB) planned to set up a branch in Cambodia in a bid to expand its Asian footprint.
TCB said Cambodia, which it cited as part of the growing ASEAN economic bloc, had attracted a large amount of foreign investment.
The Phnom Penh branch will be used as a springboard for the bank to capture some of that investment, as well as penetrate the country’s financial market.
Neither bank has said when they will open their branches in the Kingdom. Mega International could not be reached for comment.
One economist pointed to the benefits for customers from increased banking competition in Cambodia.
“It may lead to lower interest rates, as they’re very high now, as well as an overall improvement in the banking system,” Suzuki Hiroshi, chief economist at the Business Research Institute of Cambodia, said.
Currently, the country has 29 commercial banks, but some large banks have called for consolidation in order to remove smaller players.
Officials at the larger banks have said the market is oversaturated given Cambodia’s relatively small population of about 14 million.
Nguon Sokha, however, said the industry still had a lot of room to grow.
“The ratio of the banks’ lending to Cambodia’s gross domestic product was 27 per cent at the end of last year,” she said.
“We want to see it go up to 40 per cent of GDP.”