Financial sector sees robust growth
Financial sector sees robust growth
Cambodia's financial sector continued to expand robustly last year, with outstanding loans and deposits at the end of the year maintaining double digit growth with bad loans remaining low, according to the central bank’s annual report published on Saturday.
The 2018 National Bank of Cambodia (NBC) report stated that outstanding loans in the Kingdom’s financial industry – a combination of banks and microfinance institutions – grew by 19 per cent to $24.5 billion by the end of last year, while deposits increased by 15.3 per cent to $22.1 billion.
The industry’s total assets grew to $40 billion at the end of last year, increasing 19.4 per cent from the end of 2017.
The report showed that the Kingdom’s financial industry maintained solid growth and has been expanding its area of coverage nationwide, establishing itself as a major contributor to national economic growth.
“The industry is being modernised parallel to the growth of financial technology and has seen upgrades in financial infrastructure and electronic payment services,” said the report. “These factors have reduced operating costs and increased efficiency, supporting the increase of business and investment activities.”
The report said the Kingdom’s financial industry consists of 43 commercial banks, 14 specialised banks, seven microfinance deposit-taking institutions and 73 microfinance institutions.
Among the total loans and deposits in the country’s financial sector, bank institution loans amounted to $19.4 billion at the end of last year, increasing 20 per cent from the end of 2017. Deposits in the banking sector also grew 14 per cent to $19.8 billion.
Meanwhile, the value of the outstanding balance of all loans in arrears in the banking sector accounted for 2.8 per cent at the end of last year.
The report also revealed that microfinance institution loans reached a total of $5.4 billion at the end of last year while deposits reached $2.5 billion. The microfinance institution industry loan portfolio at risk accounted for one per cent.
Acleda Bank Plc president and group managing director In Channy said a growth rate of financial sector loans between 15 to 20 per cent of the current outstanding loan amount is both good and manageable.
Channy added that Cambodia has a good monetary policy in place to manage risk and stimulate stable economic growth. He said concerns for the Cambodian banking sector – such as liquidity, operations, foreign exchange and credit risks – are well managed by NBC.
“I think NBC has all the regulations in place to safeguard the financial sector and at the same time, individual banks and financial institutions strictly follow the regulations at all times,” he said, adding that financial institutions have mechanisms and guidelines in place to fully comply with all regulations and mitigate risk.
