Some of Cambodia’s largest banks report double-digit decline in deposits and loans for first quarter of 2009 as the global financial crisis begins to impact on Cambodia
Cambodia’s banks are feeling the pain of the global economic downturn.
DEPOSITS and loans fell in the first quarter of this year due to a worsening economic crisis and lower business activity, bankers told the Post at the end of last week.
"Customer deposits at the Union Commercial Bank (UCB) dropped 15 percent from US$103.75 million in the first quarter of 2008 to $87.94 million in the first quarter of this year," said Yum Sui Sang, CEO of UCB.
"Outstanding loans also dropped 9.2 percent to $60.27 million in the first quarter of this year from $66.3 million in last year's first quarter."
He said the drop had come as the global financial crisis affected his bank's customers, who are mostly foreign businessmen from China, Hong Kong and Macau working in Cambodia's garment sector.
"Businesses are suffering - especially in the garment sector and for development projects - it affects their turnover ... our bank deposits are also low," he said Wednesday.
But he added that the bank employs 161 staff and that it was not planning any layoffs.
"Despite the decline, we are still earning a profit.... We forecast a decline of around 10 percent this year and hope to see the recovery at the start of next year; however, it's dependent on the outside economy."
In Channy, president and CEO of Cambodia's largest bank by deposits, ACLEDA, said Thursday that in the first quarter of this year, deposits at his bank had grown only half as much as the same period last year.
"In the first quarter of last year, ACLEDA Bank received $74 million in deposits, which brought the total deposit amount to $416.7 million, while in this year's first quarter, we received $34.5 million, bringing total deposits to $527 million," said In Channy.
He also attributed the slow growth in deposits to the crisis. "Less business activity makes for less activity in deposits as well," he said.
He said, however, that total lending had remained comparable to last year, with the bank lending smaller loans to more customers.
"Last year, loan packages were rather big, but in the first quarter of 2009, loans were a lot smaller.
"The number of customers, however, has grown by about 50 percent over last year," said In Channy.
"In the first quarter of 2008, 7,397 loans worth $423 million were granted to customers, and in the first quarter of 2009, 13,873 loans worth $456 million were offered."
"We forecast that deposits at our bank will increase around 40 percent to more than $600 million by the end of the year," he said. "Loan portfolios will rise, with 25 percent growth of total loan portfolios expected."
Chan Kok Choy, executive director of Vattanac Bank, said Friday that during the first three months of 2009, the bank received deposits of $15.11 million, bringing the total to $167.99 million.
However, he said the bank's loans had dropped to $100 million as of March this year from $103.8 million at the end of last year.
"The drop is due to a prudent lending policy adopted by the bank in view of challenging market conditions," said Chan Kok Choy.
"We project a higher deposits position by the end of 2009 and modest growth in our loans position," said Chan Kok Choy.
Stephen Higgins, CEO of ANZ Royal, said Friday that in March 2008, the bank had around $385 million in deposits and is now up to $430 million.
"Deposits at my bank are still high because, for one thing ... customers gain a lot of comfort from the fact that our parent ANZ Banking Group is one of the strongest banks in the world," said Higgins.
He said that loans had risen from about $190 million in March 2008 to around $270 million today.
"The fact that our deposits are around $160 million greater than our loans places us in a really strong position to meet the needs of our customers," he said.
"I'm not sure whether any other bank in the market can match that."
ADDITIONAL REPORTING BY MAY KUNMAKARA