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Two more banks setting up shop

Two more banks setting up shop

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Workers at a building bearing a sign for the Mega International Commercial Bank in Phnom Penh's Chamkarmon district, near the Independence Monument, yesterday. Photo by: Mai Vireak

THE National Bank of Cambodia has issued a commercial banking licence to a Taiwanese bank, while another banking licence is pending approval for a Chinese-Cambodian joint venture, central bank Director General and Spokeswoman Ngoun Sokha said yesterday.

The central bank had lic-ensed Taiwan’s Mega Internat-ional Commercial Bank to set up in the Kingdom, she said.

While the sector is steadily advancing, Ngoun Sokha she was not concerned about there being too many banks, adding that additional banks are required to attract further foreign investors to the market.

“If the market is narrow investors won’t come. Before investment decisions are made, they research and analyse the industry in a country,” she said.

She added that the investors had already analysed the secotor, and they saw opportunity to develop the banking industry.

“We don’t see banks competing with each other for customers. They each have their own clients.”

Mega International Commercial Bank has met the NBC’s capital requirements, according to Ngoun Sokha.

Although company officials could not be reached for comment late yesterday, it is believed to be setting up a branch near the Independence Monument, in the capital’s Chamkarmon district.

The NBC was also considering a licensing application for the Cambodia Export-Import Bank, although it had already green-lighted the venture in principle, she said.

The bank, which Ngoun Sokha says is to be privately owned, is a joint venture between Chinese and Cambodian investors. She declined to reveal the names of the investors yesterday until the licence was finalised.

There are 29 commercial banks, six specialised banks and 27 micro-finance instit-utions operating in the country, according to the NBC’s first-half 2011 report.

Yesterday, University of Cambodia economics and business lecturer Chheng Kimlong said the Kingdom offered opportunities for banks compared with more mature markets.

“They see opportunities to profit from Cambodia’s high   interest rates compared with other countries,” he said.

“Once they have evaluated the sector, investors will notice that there are low financial, economic and political risks in the Kingdom.”

Competition in the industry from more banks would ultimately benefit clients, he said.

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