Q and A with Han Peng Kwang, General Manager of HwangDBS Commercial Bank Plc.

When did HwangDBS Commercial Bank first come to Cambodia and what were the conditions then?

Since we started business in July 2009 we have grown from a zero customer base to more than 1,300 deposit customers and more than 150 loan customers today. Whilst numbers are important, we also place great emphasis on the quality of our clients and asset as these are critical in minimizing defaults and non-performing loans as well as ensuring we maintain our position as a safe and secure bank. As such, we exercise a very high level of due diligence when it comes to giving out loans and are currently focused on loans such as Housing Loans as well as loans to Small and Medium Enterprises that are looking to expand and grow their businesses.

How much has the bankgrown since then?

For the year 2010, the Bank recorded a total operating revenue of USD 1.08 million, pre-tax loss of USD 0.55 million for the financial period ended 31 December 2010. This is considerably higher than the bank’s initial forecast for the business’ second year in operation. Nevertheless, in tandem with the growing confidence in the local financial industry as well as the economic recovery, the Bank recorded a 200 per cent growth in our loans. Given the Bank’s increased paid up capital from USD 20 million at start up, to the current of USD 40.0 million or KHR 160 billion as at April 2011, HwangDBS CB is well positioned to offer a bigger population of the local community the opportunity to purchase properties for own stay as well as to provide safe and secure financing to the business looking to expand locally or abroad. This growth was complimented by the launch of our Micro Loan product and the Bank’s decision to focus on expanding our loans offerings to new sectors and industries. This growth is also complimented by the growth in deposits, which recorded a 14 per cent or USD 1.6 million increase for the year.

What sectors of the marketplace do you find exciting for the future?

As a young and growing economy, it infrastructure spending and improvement is expected. In addition to that, the growing population and young demographics will contribute to sectors such as real-estate, retail as well as the motor industry. As such we expect that the real-estate and construction sectors to improve as the population will require more homes and will move to areas with affordable housing and will travel to areas of work, which means, roads have to be built or improved and transportation options will grow and vary from personal/owned to public transportation. Therefore, we want to assist in the growth by providing housing loans to individuals to enable them to purchase their own residential houses. As a result, developers will be able to sell more houses and contribute the growth of the economy.

Are you optimistic about the future of Cambodia? Why?

Cambodia is one of the last frontiers in the emerging markets in Asia. The country has a strong potential to continue to growth as it is endowed with abundant land and natural resources as well as the possibility of oil. Sustainable use and fair allocation of these resources could provide more growth opportunities going forward and allowing the provincial population to grow/increase their income to a sustainable level. Additionally, its young population and comparatively low labour cost remains attractive compared with other countries in the region.

Do you think Malaysia has been of service to the development of Cambodia? Why?

Yes, Malaysia has contributed and will continue to contribute to the development of Cambodia. We have a long standing relationship with the country that dates to the time of our fourth Prime Minister, Tun Mahathir Mohammed. According to the Council for the Development of Cambodia, Malaysia was the biggest investor from 1994 to 2001. Today, Malaysia remains one of the key sources of Cambodia’s Foreign Direct Investments and is one of the top five investor countries. As reported by the Council of Development of Cambodia, Malaysia registered a total USD 21.736 million of registered investment projects approved from August 1994 to October 2009,