Phnom Penh post, SUNDAY, 03 OCTOBER 2010 21:18 NGUON SOVAN
Cambodia’s largest banks have reported substantial profit increases for the third quarter ending September, with demand for loans rising because of a resurgence in the garment, agriculture and tourism sectors.
Canadia Bank and ACLEDA Bank saw significant profit increases for the quarter from July to September compared to the previous three months, as industry officials voiced optimism about domestic economic growth.
The profit figures follow a spate of positive news for the Kingdom’s economy last week, including the Asian Development Bank increasing Cambodia’s growth forecast for this year to 5 percent from 4.5 percent and international experts at a conference in Malaysia lauding the forthcoming national stock exchange.
Canadia Bank – the Kingdom’s second-largest and most profitable bank last year – saw gross profits before tax increase by 14 percent quarter on quarter, according to Vice President Dieter Billmeier.
He said the increased profits enabled Canadia to boost its lending faster than expected with loans already surpassing its planned US$450 million budget for the year.
The increased demand was particularly from sectors such as agriculture, service, wholesale and retail, and import-export during the most recent quarter, he said.
“That clearly shows the continuing support and trust of the general public in Cambodia’s banking and finance sector,” he said.
ACLEDA Bank CEO In Channy said the garments, tourism, and agriculture sectors were all performing well, contributing to profits.
The bank – Cambodia’s largest by number of branches – earned a net profit after tax of $7.2 million in the third quarter, up 29.6 percent compared to $5.5 million in the three months previously.
“We forecast demand for loans will continue to be high towards the end of the year,” he said, and added that the gains had led to a boost in the bank’s ability to lend.
Outstanding loans climbed 9.35 percent to $671.9 million in the latest quarter, from $614.5 million during the second quarter. Deposits grew 8.17 percent to $858 million at the end of the third quarter.
Its non-performing loan rate declined to 0.7 percent by the end of the third quarter from 0.94 percent at the end of the second quarter.
Stephen Higgins, CEO at Cambodia’s fourth-largest bank ANZ Royal, said his company was seeing more transactions in agribusiness and profits were still holding up well, despite some unsustainable pricing strategies by competitors.
The bank’s NPLs were 5.4 percent last year, according to National Bank of Cambodia statistics.
Higgins said the rate of new NPLs had been fairly negligible this year.
Meanwhile South Korea’s largest bank, Kookmin Bank, saw deposits at its Cambodian subsidiary increase 53.8 percent during the quarter to $20 million. The bank – which set up shop in Cambodia in May last year – also saw outstanding loans increase 33 percent to $16 million, according to its Cambodian CEO, Jang Ki-sung.