Cambodia and Seoul-listed DGB Financial Group will further ramp up investment cooperation as the Kingdom prepares to pen a bilateral free trade agreement (FTA) with South Korea in June.
A memorandum of understanding (MoU) was signed to this effect on February 24 between Cambodian ambassador to South Korea Long Dimanche and DGB Financial Group Inc CEO Kim Tae-oh.
Dimanche told The Post on February 28 that an MoU with a major Korean financial institution not only reflects the growth of trade relations between Cambodia and South Korea, but also paves the way for more Korean investors to invest in the Kingdom.
He stressed that the embassy carries out a wealth of targeted dissemination work and organises meetings with company representatives and investors to highlight the Kingdom’s considerable potential for direct investment.
“DGB Financial Group clearly sees the Cambodian economy’s potential for rapid development and this requires companies to improve cooperation and coordination with the embassy to further expand investment into Cambodia,” he said.
In the next step, the Daegu-based financial group plans to invest in digital systems in Cambodia, according to Dimanche.
With the tentative date for the FTA signing fast approaching, Dimanche stressed that the tariff exemptions provided by the deal on a wide range of items would substantially prop up trade between the two countries.
By the same token, however, Cambodia must ramp up production capacity and quality, he cautioned.
The MoU also stipulates collaborative arrangements in other areas such as social programmes that benefit Cambodians living in South Korea and those back at home.
DGB Financial Group will offer special interest rates for Cambodian migrant workers who wish to take out loans and will provide support to Cambodian students in South Korean executive training programmes.
According to Kim, the financial group was launched in 2011 and now runs eight subsidiaries – DGB Daegu Bank, HI Investment & Securities Co Ltd, DGB Life Insurance Co Ltd, DGB Capital Co Ltd, DGB Asset Management Co Ltd, DGB U Pay Co Ltd, DGB Data System Co Ltd and DGB Credit Information Co Ltd.
Cambodia Chamber of Commerce vice-president Lim Heng said the improvement in diplomatic relations has led to a steady rise in the number of Korean investors drawn to Cambodia with interests in all areas, from agriculture to electronic components.
He said this surge in Korean direct investment will not only help create new jobs and income for Cambodians, but will also help improve the Kingdom’s trade balance.
“Cambodia rolls out the red carpet for all investment projects and all avenues of synergy with Korea, and the penning of a bilateral FTA between Cambodia and Korea will further broaden trade relations between the two countries,” he said.
DGB Financial Group operates in Cambodia through DGB Bank Plc, a wholly owned subsidiary of DGB Daegu Bank.
In October, DGB Bank received the nod from the National Bank of Cambodia (NBC) to restructure from a specialised bank into a full-fledged commercial bank to expand its banking business in the Kingdom, according to South Korea’s Yonhap News Agency.
Trade between Cambodia and South Korea clocked in at $884.88 million last year, down 17.77 per cent from $1.032 billion in 2019, according to Korea International Trade Association (KITA).
The Kingdom exported more than $317 million worth of goods last year, down by 5.4 per cent year-on-year, and imported $567 million, or down 18.6 per cent.
On the Korea Exchange, DGB Financial Group’s share price fell by 70 won ($0.062) or 0.98 per cent to close at 7,070.00 won on February 26 for a market capitalisation of 1.196 trillion won, with 521,677 shares traded.