Logo of Phnom Penh Post newspaper Phnom Penh Post - ACLEDA receives credit rating boost from S&P Global

ACLEDA receives credit rating boost from S&P Global

Content image - Phnom Penh Post
Traffic moves in front of the ACLEDA Bank Plc headquarters on Phnom Penh’s Monivong Boulevard. Hong Menea

ACLEDA receives credit rating boost from S&P Global

Global credit-rating agency S&P Global Ratings on December 16 upgraded the Stand-Alone Credit Profile (SACP) of the Kingdom’s largest commercial bank ACLEDA Bank Plc from “bb-” to “bb”.

S&P affirmed its ‘B+’ long-term and ‘B’ short-term issuer credit ratings on ACLEDA with the outlook on the long-term rating remaining stable.

It said: “We affirmed the ratings because we expect ACLEDA to maintain its improved capitalisation, strong market position, sound earnings and above-average funding profile in Cambodia over the next 12 months.

“We assess the risks of economic imbalances in Cambodia’s banking system to be high, stemming from rapid credit expansion and high property prices.

“But the direct negative impact on ACLEDA’s financial profile is likely to be limited, given the bank’s relatively low exposure to construction and real estate activities.”

ACLEDA president and group managing director In Channy attributed the SACP upgrade to the following reasons – the bank maintains a diversified asset, careful management and takes all relevant risks as a basis for strong growth and capitalisation.

He said: “All of these factors reflect the strength of ACLEDA Bank’s business network operation by maintaining sustainable revenue without any impact.

“The stable outlook reflects the view that ACLEDA Bank Plc will maintain its financial profile, with sufficient buffers to stabilise the business.”

S&P pointed out that ACLEDA will benefit from its capital accretion over the past few years, which is a result of its sound capital generation (internal and external) and consistently lower loan growth than the system’s.

It said: “This has led to an improvement in our risk-adjusted capital [RAC] ratio calculation for the bank to about 8.6 per cent as at September 30, 2020, from 8.2 per cent as at December 31, 2019.

“We forecast ACLEDA’s loan growth will remain well below similar-sized peers’ but earnings should remain sound, leading to the bank maintaining a RAC ratio of 8.0-8.5 per cent over the next 18 months.

“We revised our assessment of the stand-alone credit profile [SACP] of ACLEDA to ‘bb’ from ‘bb-’ to reflect the improved capitalisation.

“We believe ACLEDA’s modest loan growth has ensured there are limited latent risks in the portfolio, and the data so far has indicated a limited amount of restructured loans associated with Covid-19.”

S&P said the low levels of restructured loans relative to the system reduce the risk of further asset quality deterioration over the next 12 months.

Asset quality across Cambodia’s high-risk banking system remains dependent on the economic recovery over the next 12 months, particularly in regard to tourism and foreign investment, it said.


  • Omicron patients can stay home: PM

    The Ministry of Health has issued a directive on the treatment of people who have tested positive for the highly transmissible Omicron coronavirus variant, following a suggestion from Prime Minister Hun Sen on the night of January 21. The directive permits home quarantine for those who

  • Cambodia’s first ever anime festival kicks off Jan 22 at capital’s F3 centre

    Phnom Penh's first ever Anime Festival will bring together fans, artists, shops and other local businesses with ties to the Japanese animation style for cosplay competitions, online games, pop-up shops and more on January 22, with Friends Futures Factory (F3) hosting. F3 is a project that

  • Mr Pancake or M Crepe? Tasty by any title

    Crowds of people gather around a lone man with a mobile food cart every day at around 2pm in front of the Institut Francais du Cambodge to order what many say are the best crepes in Phnom Penh. To some – even to the man making

  • Phnom Penh condo market loses steam

    Just four new condominiums were launched for sale last year in the capital, down from 17 in 2020, according to research by CBRE Cambodia. The four developments comprised “more than 1,000” units, while the 17 in 2020 consisted of 10,866, the real estate firm reported. CBRE Cambodia categorises condos as “high-range”, “

  • Fourth dose Covid booster drive jabs 43K in two days

    In the first two days of the fourth-dose Covid-19 vaccination campaign, more than 43,000 people volunteered to get the jabs, while over 4.6 million people have received a third shot. Health ministry spokeswoman Or Vandine said that fourth-dose vaccinations, which began on January 14 exclusively with the Pfizer

  • Molnupiravir treatments available at Cambodia Post

    The working group overseeing the management, distribution and supply of strategic drugs in the fight against Covid-19 at the Ministry of Post and Telecommunications has begun distributing 200mg molnupiravir capsules with the brand name Molnatris at all branches of its Cambodia Post from January 19 in