Ecoggins has an MBA in global management from the University of Phoenix and a Bachelor of Arts in political science from CSU.
Banks in Cambodia
Investment opportunities in emerging and frontier markets may not be for the squeamish or faint of heart, but opportunities are available. Frontier markets are capital markets at the beginning stages of economic development that show at least some potential for better-than-average growth over the long term.
In 2011-2012, the Kingdom of Cambodia was identified by at least a couple of investment firms as a frontier market. While much risk still remains in the Cambodia economic landscape, private equity investors looking for opportunities for capital growth through the micro-loan or small to medium business development may want to consider the Land of Smiles.
Of course, the first questions any serious investor or business developer might wish to ask before sticking their toes in might include questions of (a) political risk and (b) stability of the banking sector. While the political climate in the Kingdom of Cambodia looks relatively stable, this hub highlights the stability of the banking sector and lists the top 10 banking institutions in the Cambodia banking sector.
Institutions in the Banking Sector of Cambodia
- Acleda Bank
- Canadia Bank PLC
- Cambodian Public Bank
- ANZ Royal Bank
- Bank of Investment and Development of Cambodia
- Foreign Trade Bank of Cambodia
- Maybank Plc.
- Union Commercial Bank Plc.
- Bank of China Phnom Penh
- Advanced Bank of Asia Ltd.
The National Bank of Cambodia
The Cambodia banking sector is supervised by the National Bank of Cambodia. The National Bank of Cambodia was first established in 1954 after the country gained independence as a French colony. The Bank closed in 1975 and then re-opened and operated under the name People's Bank of Kampuchea from 1979 to 1992. In 1992, Cambodia's central bank changed back to the National Bank of Cambodia. NBC is currently led by His Excellency Chea Chanto who serves as governor of the central bank.
Cambodia Banking Sector
At the end of 2011, Cambodia's banking sector consisted of 31 commercial banks including 22 institutions incorporated locally and 9 foreign bank branches. The ASEAN nation's financial institutions in terms of total assets grew by a robust 24.39% from 2010 levels. A total number of deposit accounts increased by 19% to $1.27 million, while the number of borrowers was up only a touch at 3%.
In a forward to the annual report, H.E. Chea Chanto, Governor of the National Bank of Cambodia reported a cautious optimism concerning his country's banking sector. His optimism was fueled by the significant growth in total assets brought about by the injection of paid-up capital, improved liquidity, as well as incremental increases in assets and profitability since 2009. The challenges ahead include (a) the fragile nature of the World economy due to the public debt crises in Europe and the USA and (b) room for improvement inherent in a fledgling financial sector at the early stages of development.
In an October 2012 report, investigators from the Economist Intelligence Unit rate Cambodia's banking industry as relatively stable. Some analysts caution that some banks may be underreporting the number of large loans to single borrowers. Still, EIU notes that total foreign assets outpace total foreign liabilities which should keep the banking sector stable in the short term.
1. Acleda Bank
Acleda Bank is Cambodia's largest bank with $6.06 billion in assets as according to the National Bank of Cambodia's annual Supervisory Report for 2011. The bank boasts an industry-dominating 234 branches spread throughout the country and accounts for an 18.9% share of the Cambodia banking sector market. Acleda Bank's total assets grew by 27.8% over 2010 figures.
2. Canadia Bank PLC
Canadia Bank Plc ended 2011 as Cambodia's second largest bank in terms of total assets. The National Bank of Cambodia listed Canadia Bank as managing $5.28 billion in assets. Accordingly, Canadia Bank accounted for 16.5% of the market share in Cambodia's banking sector.
3. Cambodian Public Bank
According to the 2011 NBC Report, Cambodia Public Bank was the third largest bank in Cambodia. Cambodian Public Bank is the largest foreign-owned bank and held $4.09 billion at the end of 2011. Established by Malaysian investors, Cambodian Public Bank accounted for 12.8% of Cambodia's banking sector.
4. ANZ Royal Bank
At the end of 2011, ANZ Royal Bank listed as Cambodia's fourth largest bank. ANZ Royal is a subsidiary of ANZ from Australia and New Zealand with 55% foreign-owned and 45% owned by Cambodia's Royal Group led by Kith Meng. In all, ANZ Royal managed about $2.84 in assets and accounted for 8.9% of the Cambodia banking sector.
5. Bank of Investment and Development of Cambodia
The Bank of Investment and Development of Cambodia (BIDC) was listed by the National Bank of Cambodia as the country's fifth-largest banking institution. As of the end of 2011. BIDC managed $1.82 billion in total assets and accounted for 5.7% of Cambodia's banking sector.
6. Foreign Trade Bank of Cambodia
Foreign Trade Bank of Cambodia was listed by the National Bank of Cambodia as the nation's sixth largest banking institution. 100% Cambodia national owned, FTB managed a reported $1.65 billion and accounted for 5.2% of the banking sector market share.
7. Maybank Plc.
The National Bank of Cambodia reported Maybank as Cambodia's seventh largest banking institution. As of the end of 2011, Maybank handled $1.29 billion in total assets which accounted for a 4.0% market share of the Cambodia banking sector. Maybank is 100% foreign-owned and has 11 branches (7 in Phnom Penh and 4 in provincial areas).
8. Union Commercial Bank Plc.
Union Commerical Bank Plc. was listed as the eighth largest bank in the Kingdom of Cambodia. According to the 2011 NBC report published in April 2012, UCB handled $1.03 billion in total assets which accounted for 3.2% of the Cambodia banking sector market share. UCB assets grew nearly 25% over against its 2010 holdings. Union Commercial Bank offers a one-year CD at 5.5% which could be attractive in comparison to meager rates now offered in the United States and other developed markets around the world.
9. Bank of China Phnom Penh
Bank of China is a relatively new entry in the Cambodia banking sector. Bank of China opened its first branch in Cambodia on May 9, 2011. This new entrant in the Cambodia banking industry ended 2011 as Cambodia's ninth largest bank. Bank of China has one branch located in Phnom Penh, is 100% foreign-owned, and managed nearly $834 million in total assets.
10. Advanced Bank of Asia Ltd.
Advanced Bank of Asia was listed by the National Bank of Cambodia as the ASEAN nation's 10th largest bank. At the end of 2011, ABA handled $818 million in total assets and accounted for approximately 2.5% of Cambodia's banking sector market share. Advanced Bank of Asia is 100% foreign-owned.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
Cambodia on December 02, 2017:
Cambodian banks are not stable. The government is still under a military dictatorship and can seize depositors' accounts anytime, especially those of foreigners, to dilute their cash while they do quantitative easing. If Europe can freeze the billions held by Americans, such as Iceland and now France, it will be worse in Cambodia. The only banks that are safe in Europe are Swiss banks and in Asia, Singapore banks.
ecoggins (author) from Corona, California on November 12, 2012:
Thank you teaches12345, Cambodia banking sector deposits have grown significantly since 2009. It seems that more investors are finding Cambodia to be worth trying out. I would be a little cautious. While the Central Bank board of directors seem to be making incremental improvements in governance and supervision, there are still challenges. If one decided to deposit funds in a Cambodian bank, I think it would be best to do so a little at a time.
For instance, Union Commercial Bank offers a 5.5% one-year CD. To check out the safety of such a deposit, an investor might try depositing the minimum required deposit for one year and see how it works out.
If the depositor is a foreigner, I would not invest too much at one time. Investing too much at one time could be a problem for a foreign investor. Cambodia has anti-money laundering laws which could be triggered if too much money is deposited too suddenly.
Dianna Mendez on November 08, 2012:
Cambodia has quite a lot of bank investments, as you say, the investors take a risk. It sounds like, from what I read, that the country has stability and would be worth the risk.