Logo of Phnom Penh Post newspaper Phnom Penh Post - S&P upbeat on ABA Bank’s franchise business, affirms ‘B+’ rating, stable outlook

S&P upbeat on ABA Bank’s franchise business, affirms ‘B+’ rating, stable outlook

Content image - Phnom Penh Post
S&P affirmed its ‘B+’ long-term and ‘B’ short-term issuer credit ratings on Cambodian-based ACLEDA Bank Plc. Heng Chivoan

S&P upbeat on ABA Bank’s franchise business, affirms ‘B+’ rating, stable outlook

Advanced Bank of Asia Ltd (ABA Bank), a subsidiary of National Bank of Canada, on December 17 became the Kingdom’s second commercial bank to be given a ‘B+’ credit rating with stable outlook by global rating agency S&P Global Ratings.

This comes a day after S&P affirmed its ‘B+’ long-term and ‘B’ short-term issuer credit ratings on Cambodian-based ACLEDA Bank Plc. The outlook on the long-term rating is stable.

In a report issued on December 17, the S&P noted its view that ABA Bank will sustainably manage rapid growth in loans and deposits despite the Covid-19 pandemic.

The researchers also expressed their opinion that ABA Bank’s business franchise trajectory, capitalisation, risk profile, and funding and liquidity will remain unchanged over the next 12 months.

“ABA’s business franchise is strengthening, in our view, underpinned by significant growth in its market share. The bank continues to expand its loan market share, physical and digital distribution network, and customer base.

“We believe its expansion ambitions and good operating efficiency support its above-average profitability,” the S&P experts said in the report.

ABA Bank chief international operations officer Zhiger Atchabarov said the S&P rating reflects the bank’s performance, and especially the sound quality of its assets.

He said: “We welcome the credit rating reaffirmation by S&P. It confirms the solidity of our strategy, high quality of our assets and emphasises the financial stability of ABA despite current challenges, both local and global.”

The S&P also pointed out ABA Bank’s stable business position and its potential for further growth, saying that the institution will continue to experience absolute and relative rapid growth in its business franchise and loan book.

“The bank is well-positioned to take advantage of an expected post-pandemic economic rebound. This will likely be reflected in continued growth in its market share of loans and deposits over the next 18 months,” said S&P.

The bank’s large customer deposit base will likely continue to grow at least in line with loans, with its strong digital platforms to be a competitive advantage, the S&P report adds.

“We view the increase in customer deposits as positive, given these funds are generally stickier than wholesale funding.

“The National Bank of Canada has demonstrated an ongoing willingness to invest in ABA’s subordinated debt which, in our view, also gives ABA access to tighter pricing in wholesale debt markets,” it adds.

In 2017, S&P assigned a ‘B’ credit rating to ABA Bank and the rating was upgraded to ‘B+’ last year based on the bank’s material and growing market share of loans and deposits, with above-average profitability.

As of December 4, ABA Bank has a network of 78 branches and offices in 21 provinces. Last year, ABA Bank logged a record high profit.

Net income constituted $127 million, up 72 per cent compared to the end of 2018. As a result, the Return on Equity ratio (ROE) was 33 per cent last year, which is the highest in the industry.


  • Cambodia to waive quarantine requirements Nov 15, no PCR test required

    Prime Minister Hun Sen has decided to lift all quarantine requirements for fully vaccinated travellers and visitors – both Cambodians and foreign nationals – effective from November 15 onward. In a special message addressed to officials and relevant authorities on November 14, Hun Sen said this policy will enable

  • PM: No more quarantine for vaccinated travellers

    Cambodia is lifting all quarantine requirements for vaccinated inbound travellers entering Cambodia by air, waterway or land border checkpoints effective from November 15. Travellers will be required to take a rapid antigen test on arrival rather than waiting for the results of the lengthier polymerase chain

  • No payment required for travellers taking rapid Covid tests on arrival

    Ministry of Health officials said there would be no payment required for the rapid Covid-19 tests given to travellers who arrive in Cambodia from November 15 onwards after the quarantine requirement is lifted for fully vaccinated people. Health ministry spokeswoman Or Vandine told The Post on

  • General’s gun smuggling ring busted

    The Military Police sent six military officers to court on November 22 to face prosecution for possession of 105 illegal rifles and arms smuggling, while investigators say they are still hunting down additional accomplices. Sao Sokha, deputy commander of the Royal Cambodian Armed Forces and commander of

  • More Cambodians studying in US

    The number of Cambodian students studying at US colleges and universities in 2020-21 increased by 14.3 per cent over the previous year despite the Covid-19 pandemic, according to a recent US government report. The 2021 Open Doors report on International Educational Exchange showed that 848 Cambodian students studied

  • Cambodia, Thailand to discuss border reopening

    Cambodian authorities from provinces along the Cambodia-Thailand border will meet with Thai counterparts to discuss reopening border checkpoints to facilitate travel, transfer of products and cross-border trade between the two countries. Banteay Meanchey provincial deputy governor Ly Sary said on November 22 that the provincial administration