The new CEO of Canadia Bank says Cambodia is in a unique stage of development, with a stable government and a welcoming attitude toward foreign investment.
Malaysian Michael Lor, who took up the Canadia Bank position as CEO in July this year, says he describes the situation in Cambodia today as being like a playground.
“This playground does not have many toys yet, so if you want to come in and play, you’ve got to bring in your own toys. The good thing is there’s no lock, you are welcome, just bring your toys and enjoy yourself,” he said.
Carrying on the playground analogy, Lor says this situation will disappear during the next three years when the playground will become full of toys.
“This will not be the case for very long. In the next three years time the playground will have a lot of toys. The playground will also have a door and a gate and a fence.”
Lor says right now is a great time to invest in Cambodia because the country is stable and welcomes investments. Lor says the use of the US dollar has helped create the stable situation.
“You don’t have hyperinflation; the growth is stable, from about 6 to 7 per cent. That’s important for investors. Cambodia is more stable and inflation is under control. The government is stable politically.
This is a great time for investors to come in. The labour force is available and a lot of people speak English and Chinese,” Lor said.
Looking at the ASEAN region, Lor says there are three countries which have attractive investment climates because of their state of development: Cambodia, Laos and Myanmar.
“Cambodia is the next frontier countries for people to consider,” Lor said. “Laos is small in population and opportunities for growth are slower by virtue of area and population size. Myanmar is huge and has begun to open. Myanmar needs to take next five years or so, to get their logistics and regulations right, and convince the general public that Myanmar’s stability is there to stay.”
Lor says Cambodia has a reasonable population of people who are young and growing with increasing education. “The cost of doing business here is low. The entry and exit of capital is convenient. The investment climate is very welcoming. The country welcomes you to come in, but you should bring in your own toys: your talent: systems, expertise and processes. Cambodia is a great playground.”
By contrast Lor says Thailand, Indonesia, Malaysia, Singapore and Vietnam which have all undergone considerable economic growth, have higher costs of entry and more regulatory restrictions.
Because he’s Malaysian and knows his country very well, Lor says Malaysia has flexibility between extremes, which may constitute a good development model for Cambodia to emulate somewhat.
“If you look at Malaysia and countries in the region, you realize that Malaysia is a little less clinical and has a sense of flexibility. Malaysia is developed, and you can have your fast food like McDonalds, and you can still have beautiful hawker’s food. Despite development, it has remained less rigid, more friendly and warm to a certain extent.”
Lor says politics aside; Malaysians behave very well toward each other.
“A lot of my good friends are Malays, Chinese and Indians. All these people work very closely together. Somehow, in the environment of Malaysia, with the business and the education, you realize that Malaysians are generally much more adventurous, travelling all over the place, and prepared to step out of country, to invest, to work, to develop.”
Lor himself studied in Singapore and a lot of his classmates were Malaysians. When he worked in Thailand, a lot of his colleagues were Malaysians.
“Now you look at Cambodia and you see a lot of Malaysians. My friendly competitor across the road at Campu Bank has been here for a long time. You see a lot of actual Malaysians who are ready to live somewhere else.”
Lor says Malaysia has rich natural resources including tin, rubber, and petroleum.
“Here in Cambodia you have a lot of agriculture and rice and Cambodia is still flexible with nice restaurants, noodle stalls. Cambodian people are a little bit like Malaysians in that they are adventurous to migrate from rural areas, to work for all kinds of companies. They are adventurous and prepared to take risks to enhance their career and develop themselves further. This will augur well for the future because it will generate people who will innovate and be creative.”
Regarding Canadia Bank, Lor says out of the big four here in Cambodia, Canadia is unique in that it is more local than the others in terms of ownership. (Compared to ACLEDA Bank, for example which has a significant European ownership component)
“Canadia Bank today is the largest local bank, which reflects the ownership. They are Cambodians and here to stay. Canadia Bank was set up 22 years ago to serve Cambodian people. These are the same people who will stay whatever happens.”
Lor said local “anchor” banks were important in a global landscape because they would provide stability.
“That’s the role of Canadia Bank. It is important that we remain large and strong. Our owners are not short-term investors. The shareholders are Cambodians and here to stay which is why the role of Canadia Bank is extremely important within the financial sector.”
Lor said that whenever sudden financial meltdowns happen, people realize that decisions are often made outside the country.
“When those situations happen, the local banks have to fill in this gap. That is the importance of Canadia and that’s the reason why we have a lot of loyal customers who have been with us many years, through good and hard times. Loyalty is always mutual. When customers understand you will stand with them through thick and thin they will also stick with you and that’s important.”
The current work of Canadia Bank, Lor says, is putting in systems of governance, infrastructure, guidelines and procedures to prepare for the next stage of growth.
Toward that, Lor has been implementing “Project LEAP” which stands for “Learning Employees Accelerating Performance,” and is designed to enhance core business, develop new business, enhance risk management controls, enhance human resources and enhance corporate efficiency and processes.
Lor says the results have been a tighter organization, clearer job descriptions, greater efficiency and benefits for employees and performance-based compensation.
For new business, Canadia Bank is looking into microfinance, the insurance business and looking to enhance trade finance and foreign exchange activities.
“We feel these businesses would be useful to augment the traditional business of collecting deposits and lending money,” he said.
Canadia Bank employs 1,300 people across 39 branches and is poised to open another 10 branches. Canadia Bank branches are open six days a week, only closed on Sunday. Lor says Canadia Bank aims to develop new products and channels as well as internet and mobile banking.
“Despite the fact that we are one of largest banks in Cambodia, our market share continues to increase year on year.”
Lor says Canadia Bank refers customers to each other.
“Because of the size of our customer base, and length of history, our customers can depend on the bank for referrals of customers. We allow our customers to know each other which helps them in business. The basic needs of our customers must be met first and we aim to do it very very well,” he said.
Lor has two sons, one of whom, Leon, is 20 years old and studying physiotherapy at Curtin University in Australia and his younger, Sean, 15, who attends secondary school in Kuala Lumpur and lives with Lor’s wife, Christine.
Born in 1963 in Kuala Lumpur, Lor was the sixth in a Chinese family of seven, where his father had a business dealing in fertilizer.
They had nine people living in a 700 square foot flat, and he loved it because the family was strong.
Lor got a degree in economics from the National University of Singapore in 1988.
During his career he started at DBS Bank, and later worked in Thailand, handling the merger between the Thai Danu Bank and the Thai Military Bank in 2004.
“After we completed the merger I was approached by RHB Bank and returned to Malaysia in the middle of 2004 and was head of consumer banking for RHB where I stayed on for three years to build business franchise,” he said.
In late 2007 Lor went to work for Hewlett Packard for a short time, followed by a job at Eon Bank as head of consumer banking and was made CEO in 2009.
During that period Eon Bank’s profits doubled every year, until finally in March, 2011 it was taken over Hong Leong Bank.
“Our profits doubled every year, despite the lingering takeover,” Lor said.
After that, Lor was approached by Canadia Bank and has since been enjoying Cambodia, and has high hopes for the future.