DIVERSIFIED regional holdings firm Jardine Matheson Group has acquired a 12.25 percent stake in ACLEDA Bank for an undisclosed sum, according to a Thursday announcement, a deal that analysts said represented confidence in Cambodia’s financial sector after a turbulent year for the global economy.
JSH Asian Holdings, a group subsidiary, will purchase the stake from FMO, the international development bank of the Netherlands, in the first change of foreign ownership in
ACLEDA, the Kingdom’s second-largest lender. “Jardines brings ACLEDA more than 175 years of experience in commerce and banking in Asia,” ACLEDA Chairman Chea Sok said in a statement Thursday.
The Hong Kong-based firm will offer its new Cambodian partner expertise and business referrals, added ACLEDA Bank Vice President John Brinsden.
For Jardines – which has stakes in Asia Commercial Bank in Vietnam and merchant bank Rothschilds Continuation – the announcement of the transfer after approval by the National Bank of Cambodia ends years of negotiations in Phnom Penh.
“We believe ACLEDA offers significant growth potential in a country that has a bright future,” said Alain Cany, Jardine Matheson Vietnam group country chairman. “We are very much looking forward to being a supportive shareholder in the coming phase of its growth.”
Although the sum was not disclosed, FMO is believed to have made a substantial profit on its purchase nine years ago. Since then, the bank had injected regular capital through rights issues, said Brinsden, adding that FMO would continue to offer loan support and training. “We feel this is the right time for a major private investor such as Jardines to acquire our stake in ACLEDA,” FMO Chief Information Officer Jurgen Rigterink said in Thursday’s statement.
After completion of the deal, which was expected by the end of the year, Cany will replace FMO’s Joseph Hoess on the ACLEDA board of directors, although Hoess will remain on the ACLEDA Bank Lao Ltd board as vice chairman.
International Business Chamber Chairman Bretton Sciaroni said the deal was a sign that the Kingdom’s financial sector was maturing. “To have come to Cambodia at this point is a vote of confidence in Cambodia and ACLEDA,” he said Thursday. Jardine “made a very good choice”.
ACLEDA is thought to be one of the few banks in Cambodia to have weathered the financial storm that first hit the Kingdom a year ago, resulting in tight liquidity in the first quarter, plummeting profitability and concerns over rising numbers of bad loans across the sector.
The International Monetary Fund warned as recently as last week that the Cambodian financial sector remained at risk, particularly from underreported non-performing loans.
Nevertheless ACLEDA recorded a 72 percent rise in profits in the third quarter, compared to the previous period, as profits after tax jumped to US$2.32 million.