Logo of Phnom Penh Post newspaper Phnom Penh Post - Daegu pays $63M for Cam Capital

Daegu pays $63M for Cam Capital

A man exits an ATM in Phnom Penh.
A man exits an ATM in Phnom Penh. Pha Lina

Daegu pays $63M for Cam Capital

South Korea’s Daegu Bank has snapped up a 100 percent stake in Cam Capital, the Kingdom’s second-largest specialised bank in terms of assets, for $63.2 million, Korean media reported yesterday.

Daegu Bank announced the acquisition in a regulatory filing to Korean authorities on October 18, marking the bank’s third overseas investment after expanding into China and Vietnam.

The National Bank of Cambodia (NBC) – the Kingdom’s financial regulator – could not be reached for comment yesterday to confirm if the sale had been given the green light.

Nevertheless, Stephen Higgins, managing partner of investment firm Mekong Strategic Partners, said the price tag for the acquisition was adequate seeing that as a specialised bank, Cam Capital was fairly restricted in its operations and would likely have regulatory difficulties in becoming a commercial bank.

“It’s not clear what the next step for Cam Capital would have been as a specialised bank, so having a commercial bank come in to take it over does make sense provided they can upgrade it to proper commercial bank licence,” he said. “It is unlikely that the NBC would have allowed Cam Capital to upgrade to a full commercial bank licence without a reputable commercial bank coming in as the main shareholder.”

He added that while the Kingdom’s crowded financial sector needs to see more consolidation, few banks are up for sale.

Cam Capital Specialized Bank was established in 2009, and operates five branches with 260 employees. As of the end of last year, the bank’s assets stood at $86.5 million and had earned a net profit of $3.4 million, according the NBC’s annual report.

Meanwhile, according to Daegu Bank’s first-half report for 2017, the bank held $43 billion in assets with a total comprehensive income of $163 million.

This would not be the first time that Korean financial institutions have invested in Cambodian banks. In 2014, the South Korean lender Woori Bank snatched up the Cambodian MFI Malis Finance for $4.9 million. Last year,
Jeonbuk Bank – a subsidiary of JB Financial Group – purchased a 50 percent stake in Phnom Penh Commercial Bank.

Analysts have predicted that mergers and acquisitions in the Kingdom’s financial sector will become more common as foreign banks look to tap into Cambodia’s robust lending growth. This trend, in part, has been triggered by the central bank forcing all financial institutions to meet new minimum capital requirements by March of 2018.

MOST VIEWED

  • New US bill ‘is a violation of Cambodian independence’

    After a US congressmen introduced bipartisan legislation that will enact sanctions on Cambodian officials responsible for “undermining democracy” in the Kingdom, government officials and the ruling Cambodian People’s Party on Sunday said they regarded the potential action as the “violation of independence and sovereignty

  • Angkor Wat named as the top landmark for the second year

    Travel website TripAdvisor has named Cambodia’s ancient wonder Angkor Wat as the top landmark in the world for the second year running in their Travelers’ Choice Award 2018, an achievement Cambodian tourism operators expect will attract more tourists to the Kingdom. The website uses traveller

  • Ministry’s plan for net sparks fears

    The government has ordered all domestic and international internet traffic in the Kingdom to pass through a Data Management Centre (DMC) that has been newly created by the state-owned Telecom Cambodia, in a move some have claimed is an attempt to censor government critics. Spokesman

  • Hun Sen detractors ‘will die’

    Prime Minister Hun Sen on Wednesday said those who curse or insult him would eventually die without a plot of land to bury their bodies after being killed by lightning, suffering the same fate as those who recently died in Thmar Baing district in Koh