Logo of Phnom Penh Post newspaper Phnom Penh Post - Canadian bank ups stake in ABA

Canadian bank ups stake in ABA

A woman walks through the lobby of an ABA Bank branch in Phnom Penh.
A woman walks through the lobby of an ABA Bank branch in Phnom Penh. Pha Lina

Canadian bank ups stake in ABA

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.

MOST VIEWED

  • Companies listed on CSX receive 50% deduction on income tax

    Tax incentives are granted to companies that have listed their shares or issued debt securities on the Cambodia Securities Exchange (CSX), whether they are small to medium-sized enterprises or large companies. The nine stock listed companies on the CSX – with seven listed on the Main

  • Siem Reap drain canal now ‘mangrove’ promenade

    A more than half a kilometre long stretch of canal in Siem Reap has been covered and turned into a promenade to attract visitors, said Ly Rasmey, secretary of state at the Ministry of Land Management, Urban Planning and Construction, on September 16. The new pedestrianised

  • Cambodia mourns over UK’s Queen Elizabeth II

    Cambodia has joined other nations around the world to mourn the passing of Queen Elizabeth II, with King Norodom Sihanomi, Prime Minister Hun Sen and National Assembly president Heng Samrin extending their condolences in separate letters. In his letter to the late Queen’s son –

  • Final verdicts for Khmer Rouge leaders ‘vital’ for next generation

    Nearly a decade after the commencement of Case 002/02 against Khieu Samphan back in 2014, the Extraordinary Chambers in the Courts of Cambodia (ECCC) is now set to deliver its final verdict for the former Khmer Rouge head of state. The Supreme Court Chamber of the ECCC,

  • Angkor wildlife, aquarium park still to open October

    The Angkor Wildlife and Aquarium complex about 30km southeast of Siem Reap town with initial total investment of more than $70 million is reportedly still on track for an end-October opening. The park is located on a 100ha plot along National Road 6 in Kbon village, Khchas

  • Railway project studies proceed

    The transport ministry is exploring options to expedite preliminary studies on key public railway infrastructure projects, especially the conversion of the Northern Railway Line that links to Thailand into high-speed rail. Railway freight and passenger transportation has been pinpointed as a major potential engine of