Owner says Canadia reduced holding to just over 15 percent

The IMF's requirement ... does not allow us to manage two banks.

CANADIA Bank has sold about two-thirds of its stake in the Foreign Trade Bank of Cambodia (FTB) for more than US$10 million, its owner Phung Kheav Se told the Post, following pressure from the International Monetary Fund (IMF).

Canadia has reduced its holding in the formerly state-owned lender from 46 percent to just over 15 percent, he said Friday, selling much of its stake to unnamed local real estate businessmen.

The deal was agreed last month, said Phung Kheav Se, adding that Canadia had made a $3.9 million profit on the stake.

“We sold our share because we got a good price,” he said. “Moreover, we want to comply with the IMF’s requirement, which does not allow us to manage two banks.”

Phung Kheav Se said the IMF had put Canadia Bank under pressure to sell its stake in the FTB.

Canadia had wanted to sell earlier, said Phung Kheav Se, but was waiting to get the best price for its investment.

The deal has again raised the issue of transparency in Cambodia’s banking sector. Neither side has identified the buyers, and the Post was unable to confirm the transaction in recent weeks despite its being common knowledge within the Kingdom’s financial sector.

As of press time, neither the FTB nor Canadia Bank, which this month opened a new headquarters in Phnom Penh at Canadia Tower, had announced the deal via its Web site.

Gui Anvanith, general manager and a board member of FTB, declined to comment on the transaction Friday.

Phung Kheav Se said the deal had taken about six months to finalise.

The undisclosed buyers “bought our share because they believe in the growth of our banking sector,” he said, adding that the new investors would not involve themselves in the managerial side of the bank, and that therefore its day-to-day operations would not be affected by the transaction.

Phung Kheav Se said that he hoped that the IMF “will not control or interfere with us any more with this small share”.

The IMF was not available for comment Sunday.

Phung Kheav Se alluded to a possible FTB listing on Cambodia’s forthcoming securities exchange. “We still have a more than a 15 percent share [in FTB] for our own growth when we have a stock exchange,” he said.

FTB was first created shortly after the end of the Khmer Rouge regime in the Kingdom in 1979 and remained a state-owned enterprise until October 2005 when the central bank and Ministry of Finance sold stakes to Canadia Bank and ING Holding Co.