By Sok Lak
The increasing number of Vietnamese investors gives more potential to the Cambodia market. Saigon Though Tin Commercial Bank (Sacombank), on October 5, opened fully its operation as a foreign bank in Cambodia where before it was just a branch in Phnom Penh after the business growth in the country.
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| The head of Samcombank bank |
This bank inaugurated the opening of the 100 percent foreign-owned Samcombank Cambodia Plc in the country which transferred from a branch form to a full fledged operation in order to increase cross-border trade between Cambodia and Vietnam as well as expansion of Sacombank in Indochina and to foster business development.
The new bank has received approval from the National Bank of Cambodia and is supported by the State Bank of Vietnam. During the two years as a branch in Cambodia, Sacombank connected trade between Cambodia and Vietnam as well as Phnom Penh to Ho Chi Minh.
“I saw that businesses between both countries are important as they need the financing system and bank to be better in trading,” Mr. Dang Van Thanh, Chairman of Sacombank, said.
The new Sacombank Cambodia, with headquarters in Phnom Penh, has chartered capital of US$38 million with an operation license of 99 years. “We plan to increase the bank capital further in 2012,” Mr. Thanh added.
The total capital of all banks in Cambodia only reaches US$43, 000 million, but the Sacombank has received funding from International Financial Cooperation (IFC) which has a lot of investment capital in Vietnam.
“These investment funds mostly plan to be used for investing in Cambodia,” He stressed.
“As of 30th September 2011, it has total deposits of US$ 40 million, and total liabilities of US$58 million of profit before a tax of US$ 2 million, which was counted as 88 percent of 2011’s action plan. Last year, the bank garnered a profit of US $1.2 million and is expected to reach up to US$2.8 million,” said Mr. Ngyuyen Nhi Thanh, CEO of Sacobnank Cambodia.
The bank now has three branches in Phnom Penh and an additional one is planned to open in Kongpong Cham, a province bordering Viet Nam’s Tay Ninh Province, in 2012. Its target is to gain a growth of 20 percent in chartered capital, 27 percent in total asset value, 15 percent of deposit, and 43 percent in pre-tax profit annually until 2015.
The bank posted a money transfer turnover between the two countries of US$ 246 million in 2010 compared to the total bilateral trade of US$ 1.8 billion.
The figure was more than US$ 270 million in the first nine months of this year, according to Sacombank Cambodia CEO. Moreover, the bank mobilized US$ 40 million and its outstanding loans were US$ 58 million.
He stressed that including today, the bank has 1,800 customers. He also shared the difficulties the bank met in its two years of operation. In the first year, the bank had just set up, so that it had less transactions; the second difficulty lies in human resources in Cambodia, which is limited, as the bank needs to train them more in Cambodia and then send them to train in Vietnam, and the third factor is that Cambodia’s financial market is not clear, so it is hard to make a decision. However, the bank has planned to set up 17 branches within big provinces by 2015.
The Chairman of Sacombank emphasized that the bank will use a lot of investment capital in the Cambodian market in which it will focus on several sectors such as electricity, infrastructure, technology and agriculture.
The bank also has a strategy to expand the operation so as to provide shortterm gains to SEMs which is the target market, and provide loans to Vietnamese investors if they deposit their property in Sacombank in Vietnam, and all customers can transfer their money between Cambodia, Laos and Vietnam within one hour, the chairman stated.
“I believe that we will have more customers in the future and can expand its operations within Cambodia in the near future. As Cambodia’s market has a lot of the young generation in it, the bank plans to set up e-banking for Cambodia,” Mr. Nguyen Minh Tam, Vice Chairman of Sacombank Cambodia, said.
Sacombank also runs a branch in the capital of Laos, Vientiane, and plans to change its status into a full banking company next year. Three other Vietnamese banks, Agro-bank, Bank for Investment, and Development of Viet Nam (BIDV), and Military Bank have also established branches in Cambodia.
Source: The Southeast Asia Weekly, October 8-15, 2011, Vol. 5, Issue 41, Page 3
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