When Canadia Bank was established in 1991, as Canadia Gold & Trust Ltd, a joint-venture company between Cambodian-Canadians and the National Bank of Cambodia, the financial activities were based on gold dealing transactions, gold plaque manufacturing and lending to local merchants. Since then, the bank has grown significantly and expanded operations, becoming one of the largest local banks in Cambodia. For over 23 years, Canadia Bank has grown steadily.
The Post spoke with Canadia Bank CEO, Michael Lor, to discuss his company’s successes this year, its plans for the future and challenges ahead for Cambodia’s banking sector.
What are some of Canadia Banks big achievements this year?
For the second consecutive year Canadia Bank was awarded International Data Corporation’s Most Outstanding Financial Performance Bank.
CNB continues on its growth path. As of the third quarter 2014 (compared to end of year 2013), we have grown our total assets by 21.6 per cent, loans and deposits growth 18 per cent and 24 per cent respectively. In keeping with being the safest bank in Cambodia, we have maintained our loans to deposits ratio between 72 per cent and 75 per cent.
What is the outlook for Canadia Bank?
We are on track for building a regional diversified financial group. We have aggressive growth plans in all areas of our business, and we are on trajectory to meet our goals. This is a very exciting time for Canadia Bank.
Canadia Bank signed memorandums of business alliance with the Bank of Tokyo-Mitsubishi UFJ, Ltd (BTMU) and Mizuho Bank, Ltd to support foreign companies entering Cambodia. The agreements provide the framework and sound business platform for long-term cooperation, and benefits customers overseas and contributes to the expansion of Cambodia’s industry and the growth of its economy. As leaders in our respective markets our customers have confidence in working with us.
Recognising the need for better financing options and solutions for the mass market and micro-SMEs, Canadia Investment Holding PLC (CIHP) entered into the micro-finance business through a partnership with Singapore’s Fullerton Financial Holdings (FFH), a wholly owned subsidiary of Singapore based Temasek Holdings, and created Cambodia Post Bank (CP Bank). FFH leverages its solid pedigree to identify strong partners in key growing markets, and places great emphasis on a strong corporate governance structure, reliability and experience of its shareholders, strong management team and strong regional presence to deliver competitive financing options. After an intensive due diligence, FFH decided to partner with Canadia Bank for this new venture.
CIHP has an agreement in principle to enter the life assurance business. In partnership with a leading insurance and financial services conglomerate, Canadia Bank will position itself as Cambodia’s leading financial services company with a vast array of financial products and services. The market growth potential in Cambodia is significant, and Canadia Bank’s extensive branch network throughout the country, particularly in key markets such as Phnom Penh and Siem Reap, provides a competitive advantage to develop and grow the business.
With Canadia Bank’s strong local pedigree we have our sights set on expansion and growth in the region, becoming a leading regional financial services institution. Our proven track record, both financially and with responsible yet strong and consistent growth, we are prepared to embark on the next phase in Canadia Bank’s future, starting with Laos and Myanmar.
What are some of the challenges for Cambodia’s banking industry?
I see three primary challenges for Cambodia’s banking industry, and they deal generally with customer education, talent, and compliance preparedness.
Over the years there has been a proliferation of financial institutions. When this happens, sometimes customers may not have proper education to choose the right bank services provider for their needs. Coupled with the fact that this proliferation ranges across the range of financial institutions from very large to smaller specialised institutions, it may create confusion for some customers.
As the industry expands in Cambodia we will increasingly be challenged by tightness in the labour market. Already it is challenging to find properly educated and experienced banking professionals. Poaching employees, which is unprofessional at best, has been a problem. There should be greater emphasis on training and raising up the future crop of financial industry professionals.
With the ASEAN Economic Integration, there are forthcoming regulatory and compliance requirements. When these complex regulatory and compliance requirements come into Cambodia, some of the institutions may not have the capability, resources nor knowledge to be prepared and to comply.