Canadian financial institution National Bank of Canada (NBC) has increased its total investment in Advanced Bank of Asia Ltd (ABA Bank) to $148 million, becoming the local commercial bank’s majority shareholder with a 90 per cent stake, the bank announced yesterday.

Karen Leggett, chief marketing officer and executive vice president of National Bank of Canada, said Cambodia’s strong economic growth encouraged it to deepen its investment in its banking sector.

“We are continually on the lookout for long-term investment opportunities in high-growth markets”, she said.

“Cambodia, which is known for its strong economic prospects, was a natural fit.”

National Bank of Canada first invested in ABA Bank in July 2014, taking a 10 per cent stake. The bank subsequently increased its equity to 42 per cent at the end of 2015.

The new investment brings its total stake in the local bank to 90 per cent, and marks the first time for a North American financial institution to hold a majority share in a Cambodian bank.

“From the outset, we felt that this well-established institution with good governance standards would be a partner of choice”, Leggett said, adding: “I think we will have an opportunity to have a 100 per cent stake in ABA in future.”

Founded in 1996, ABA Bank has grown to 38 branches with five more scheduled to open by the end of the year. The bank’s total assets reached $928 million in 2015, with net profit doubling to $16 million, from $7.5 million in 2014.

National Bank of Canada is the sixth-largest commercial bank in Canada, with more than $170 billion in assets and 2.4 million personal clients. The Montreal-based financial institution has over 450 branches across Canada with more than 20,000 employees.

Askhat Azhikhanov, CEO of ABA Bank, said NBC’s decision to take a controlling stake in ABA indicates a strong confidence in Cambodia’s potential and was a significant milestone in his bank’s history.

“From the very beginning, we realised that both our institutions share the same vision on their business model and standards of doing business,” he said.

“What is more, National Bank of Canada shares our commitment to serve and assist clients in the small- and medium-size enterprise segment.”

“We believe that SMEs are a core element of Cambodia’s economic growth and we are delighted that our shareholder fully supports us in this,” he added.

So Phonnary executive vice president and group chief of operations at Acleda Bank, said NBC’s decision to serve the SME segment would benefit the country.

“The need for loans is still high and when we have more capital flowing there will be more choices for customers,” she said.