Tomato Specialized Bank (TSB) has had a tumultuous innings in Cambodia. Right from its inception in 2008, the bank has been experiencing a series of poor performances. In 2015, for instance, TSB’s net profit amounted to $78,000 and a high non-performing loan (NPL) ratio of 14.4 percent. However, things have taken a turn for the better for TSB with the introduction of advanced bank operation practices with active loan disbursements. TSB experienced a phenomenal spike in growth in business performances, recording a net profit of $643,000, and a NPL ratio of 1.6 percent. This was a first for the bank, and alongside this feat the assets also grew 9.8 percent from US$8.8 million to US$9.7 million within a year. Its return on assets (ROA) has inched towards a healthy 6.6 percent, clearly outperforming most banks in the Kingdom.

“Within a year, TSB had made remarkable accomplishments with the help of our valued customers and capable staff. The new practices we have introduced has managed to yield benefits. We are pushing forward and now all eyes are on 2017 and we are excited to see how we go about growth figures”, said DooYoon Kim, who joined TSB as CEO in January 2016. TSB launches new microloan In September last year, TSB introduced a special microloan with a one percent interest rate per month. This scheme attracted many Cambodian customers who borrowed the loans with higher interest rates from other banks and microfinance institutions (MFIs). With the loan project, TSB’s new loan applications tripled during the last three months. Kim further explained: “In the wake of the global financial crisis, many developed countries lowered their benchmark interest rates to historical low levels. Some countries announced unprecedented minus interest rates. It implies that local banks, financing from developed countries, are able to lower their interest rates, thereby benefitting Cambodians.” Kim attributes a significant part of the success to his team. The bank has actively supported its staff to reinforce their expertise by providing financial support for banking training courses and English communication courses. He also reinforced staff responsibility in their work and revamped organisational structure, enabling accelerated and accurate decision making, which has become a great strength of TSB. As part of their plans for this year, TSB is reviewing an innovative loan product linked with insurance, a new concept in Cambodian financial markets, which it hopes to launch later this month. “After analysing loan markets in Phnom Penh, I realised that traditional land-collateralised loans are not lucrative anymore due to severe competition among banks and MFIs. Therefore TSB has researched potential substitutes for the traditional loans,” Kim said. “TSB strives to develop new loan products, which will benefit both Cambodian customers and TSB. TSB will continue to research and analyse diverse loan products in developed countries, and test the feasibility of them, thereby expanding itself both internally and externally”, Kim explained. He added, “Some people have shown a concern that there is an uncertainty on how TSB can meet the National Bank of Cambodia’s capital increase requirements. However, with our devoted efforts to improve the performance, multiple domestic and foreign financial institutions have contacted me for acquisition or equity participations. I believe TSB will continue to contribute to the development of Cambodian society by providing competitive loans.”