One of Phnom Penh’s well known banking personalities is Malaysian Lim Loong Seng, country head for OSK Indochina Bank Ltd.

OSK Indochina Bank recently announced the merger of its parent company, OSK Investment Bank (www.osk.com.my) with fellow Malaysian financial services group RHB Capital (www.rhb.com.my).

Lim says the merger transforms the OSK franchise into a much larger and more diversified financial institution and achieves greater regional aspiration.

“The merged entity will create substantial synergies and create many advantages to both firms in addition to its greater presence and larger assets and financial strengths,” Lim said.

“This augurs well not only for OSK and the merged group but will translate into greater synergies for its operations in various countries including Cambodia.”

Lim who also serves as vice president of the Malaysian Business Council of Cambodia (www.mbccambodia.org), says Cambodia has achieved tremendous growth and progress in the last decade and is now in the process of transforming itself at a rapid pace. Lim said the average GDP growth of 9 per cent in Cambodia prior to the mortgage crisis in 2008 was impressive and the recovery at 6.8% for the last two years is just as admirable.

“The current strong growth trajectory amidst the favourable domestic investment climate, business-friendly government policies, improving infrastructure, better governance and transparencies and strong and stable government is conducive and positive for further growth,” he said.

“This growth will ultimately help to raise the income levels and living standards of the people of Cambodia,” Lim said.

“I’m very impressed with the pace of the development in Cambodia because I have witnessed so much development and so many changes here during the last four years since OSK commenced operations,” he said.

“The market is getting more sophisticated and people are getting more demanding in terms of their expectations on banking products and services. This is where a regional banking group like RHB is able to meet these kinds of more sophisticated demand and ever-changing needs of its customers in Cambodia” he said.

Lim says OSK Indochina Bank’s assets grew 54 per cent compared to the whole Cambodian banking industry, growing at 25 per cent in 2011.

OSK’s deposits in Cambodia grew at 121 per cent while the industry grew at 21 per cent.

“We attribute that growth to our ability to gain the trust of the Cambodian people and the confidence of the business community to place their savings and funds with us,” he said.

OSK’s Cambodian loan portfolio grew by 107 per cent compared with the 34 per cent growth of the whole industry last year.

Lim says the big scope for growth will continue because Cambodia is “under banked” due to its low banking penetration as “less than ten per cent of Cambodians have a bank account which means it will have great potential for growth” Lim said.

OSK Indochina Bank started operations in Cambodia four years ago with a single branch in 2008 and today has nine branches and 15 ATMs all over the country.

“We also operate a security firm set up in 2010 which is a member of the Cambodian Stock Exchange,” Lim said.

“As at June 2012, OSK Indochina Bank has assets of $142 million and a staff of 166 including 17 in its securities subsidiary,” Lim said.

OSK Indochina Bank has a share capital of $52 million, a figure that has increased four-fold since the initial $13 million in 2008.

Lim said OKS Indochina Bank offers full range of commercial banking services such as savings, current and fixed deposit accounts; personal, automobile and housing loans and property loans for individuals and companies. They also offer business loans for working capital and business expansion as well as trade financing for SMEs.

“OSK provides remittance, Western Union services and money exchange. Our wholly-owned securities firm OSK Indochina Securities offers investment banking services such as underwriting, dealing, broking and advisory services which complement the services provided by its commercial bank,” Lim said.

Lim says Cambodia’s small and medium-sized enterprises (SMEs) are growing rapidly because of the strong inflow of foreign direct investment (FDI).

“A young and fast-developing economy needs a strong and large SME community to be able to support its industrial, agricultural, manufacturing, tourism and service sectors and we are seeing this kind of growth in those and other sectors,” Lim said.

While most of the SME’s are self-funded and use borrowings from family and friends, Lim says small business owners should think about using banks to help them take it to the next level.

“Banks are in a good position to meet the needs of those SMEs which are well managed and need capital to grow. There are lots of Cambodians who own large hotels, many Cambodians in service industries and many of our customers operate as SME in the manufacturing and tourism industry, restaurants and wholesale and retail sectors,” Lim said.

One of the exciting sectors of the Cambodian economy for Lim is agriculture and agro-based industries.

“We have extended our banking services and loans to the agriculture and agriculture processing sectors including rice milling and cassava and corn processing,” Lim said.

“We have funded several rubber plantations in Kampong Cham as well as agricultural crops such as cassava, corn and cashew nuts in other provinces and we have financed the working capital and capital expansion of several rice mills and processing plants,” he said.

Lim says the proposed merger between the parent companies of OSK Indochina Bank and RHB Capital combines the strengths of both and benefits existing and new customers.

“RHB Capital Group is the fifth largest financial service group in Malaysia with total assets of $49.5 billion as of the end of 2011, with more than 11,000 employees in five countries. RHB capital group is strong in both commercial and investment banking. Upon completion of the merger, OSK will be an integral part of a much bigger banking group, and therefore in a much better position to service our customers,” he said.

“The enlarged entity will have a presence in nine countries which will give us an edge over our competitors and give our customers in Cambodia a wider network and reach in the region within and outside ASEAN including Hong Kong and China. As a result of the merger, we have 550 offices in nine countries with more than 16,000 employees.”

Lim says the multiplier effects fit in well with long-term strategic plans of OSK in Cambodia.

“OSK will be able to introduce more complementary and more sophisticated products and services with the strong financial backing of a large financial group as shareholders in RHB Capital and RHB’s ultimate parent, the Employee Provident Fund, (http://kwsp.gov.my) which is Malaysia’s largest private sector retirement annuity fund with assets exceeding $160 billion as of the end of December 2011.

“By being in a larger group with better financial resources and a wider reach, we will continue with our strategic vision to be a top bank in Cambodia. Ultimately the people in Cambodia will benefit from us being a member of a bigger group. What’s important is our ability to support our customers. Our bigger balance sheet enables us to increase our scale of activities and as our customers grow and graduate to a big league they can count on OSK for further support and valued added services. As a company grows to a certain size, because we also have strong expertise in investment banking, we can help them grow from cradle to maturity and we can continue to support them as a conglomerate,” he said.

“Now that we have had this merger with RHB, we can cater for Cambodia companies embarking on capital as well as regional expansion. They can expand out of Cambodia and we will be able to give them the kind of support and reach in other markets like Hong Kong and China. RHB is also looking into setting up a representative office in Myanmar which many businesses in Cambodia have expressed keen interest to explore business opportunities in lately.”

Lim said he wanted OSK Indochina Bank customers to know that the OSK-RHB merger strengthens its position.

“I want our customers to know that not only we are strong, we are here to stay and will continue to stay and provide even better service in Cambodia. We hope to contribute to the economic growth of this interesting market,” he said.