NBC official says at Agribank opening that assets and deposits are rising in ’10
HEALTHIER growth in assets, lending and deposits has been reported in Kingdom’s commercial banking sector so far this year, according to the deputy governor of the National Bank of Cambodia (NBC), Neav Chanthana.
Although profits in Cambodia’s commercial banking sector fell nearly 50 percent in 2009, this year’s first quarter has shown the sector bouncing back with more confidence from local and foreign investors, Neav Chanthana said at the launch of Cambodia’s first Agribank branch Monday.
“It’s been healthier in terms of assets, lending and deposits,” she said, and cited statistics showing total asset growth in Cambodia’s banking system had increased 14 percent, lending rose by 9.8 percent and deposits surged by 15 percent between January and March this year.
A report released by NBC Friday showed that profits claimed by Cambodian banks declined to US$60.2 million in 2009, from $114.7 million in 2008, as non-performing loans increased and credit expansion dropped. By the end of 2009, the report noted, total assets in the banking system were $4.99 billion, around 48 percent of GDP. Loans to customers totalled $2.51 billion, and deposits were $3.3 billion.
Neav Chanthana’s comments came as Vietnam’s largest bank by assets, Agribank, became poised to cash in on Cambodia’s banking sector by officially opening its first outlet on Monivong Boulevard.
She said Agribank – Cambodia’s 28th commercial bank and Vietnam’s third to open in the Kingdom – would bring a variety of financial products and services to the banking system.
“Agribank’s presence reflects the confidence of foreign investors in Cambodia’s banking industry,” she said at the opening ceremony.
“I hope the bank complies well with the rules of the Central Bank in order to compete with other banks with quality and effectiveness.”
Nguyen Van Giau, governor of the State Bank of Vietnam, noted during a speech that Vietnamese businesses and investments in Cambodia have increased considerably in recent years.
“The bilateral trade volume between Cambodia and Vietnam has increased by an average of 30 percent year-on-year and expected to reach up to $2 billion in 2010,” he said.
“On the investment side, 63 Vietnamese investment projects have been carrying out business in Cambodia nowadays with a total investment value of nearly $900 million.”
Agribank first opened a representative office in Phnom Penh in 2005, focusing on facilitating cross-border payment for imports and exports, according to a press release Monday.
However, the establishment of a branch in the capital means the bank can now also service the Cambodian market.
According to the release, Agribank, also known as the Bank of Agriculture and Rural Development of Vietnam, is the biggest financial institution in Vietnam, with assets of almost $26 billion and outstanding loans of $19 billion.
It employs 40,000 people and has more than 2,300 branches and transaction offices connected online, as well as relationships with more than 1,000 foreign banks in 96 countries.
“The branch opening marks the expansion and increase of the outreach of Agribank network abroad,” said Nguyen The Binh, the chairman of Agribank. “It would bridge the financial and banking markets between the two countries.”
Agribank is the third Vietnamese bank to fully operate in Cambodia after Sacombank and BIDC.