NBC offers optimistic outlook in new FSR
NBC offers optimistic outlook in new FSR
The National Bank of Cambodia (NBC) launched its Financial Stability Review (FSR) 2023 yesterday, outlining Cambodia’s financial system and proactive measures to ensure its continued stability amidst global economic uncertainties.
The review comes against the backdrop of significant global uncertainty. Geopolitical conflicts that may disrupt supply chains and lead to trade fragmentation, uncertainties surrounding China’s troubled property sector, the impacts of climate change, and the threat of cyberattacks are among the major risks that could hinder global and regional economic growth.
These risks could hinder Cambodia’s economic growth, cause inflation and exchange rates to rise, and possibly put pressure on the quality of credit among high-leverage firms and households.
The FSR, however, offered an optimistic outlook, stating that Cambodia’s banking sector has displayed remarkable resilience as reflected in its high capital adequacy and liquidity ratios.
Credit growth in the banking system reached $57.6 billion last year, up only 4.8 percent from a year earlier, while deposits increased by a healthy 13.1 percent to $47.9 billion in 2023, NBC report showed.
Within the banking system, commercial banks accounted for 91 percent of the total assets, with $76.9 billion, after the largest microfinance deposit-taking institution (MDI) emerged with a bank last year.
NBC governor Chea Serey emphasized the importance of collaboration with relevant stakeholders in maintaining financial stability.
“The NBC remains committed to collaborating with all relevant stakeholders to closely monitor recent developments and emerging risks to economic and financial stability,” Serey said in the opening speech at a dissemination workshop on the occasion of the launch of the Financial Stability Report 2023 on Monday.
The FSR 2023 serves as a key tool for NBC to disseminate its analysis and assessments of Cambodia’s economic and financial landscape, highlighting risks inherent in the financial sector, especially in the banking system, and proposing policy options to manage those risks, she said.
The FSR 2023 will help stakeholders and the public identify potential threats to financial stability at an early stage, and foster joint efforts with the NBC to implement timely and appropriate measures, the central bank governor said.
Rath Sophoan, Chairman of the Association of Banks in Cambodia (ABC) and CEO of Maybank (Cambodia) Plc, said that the country’s financial sector is running smoothly despite external shocks.
“With loan and deposits remaining healthy, it reflects that the banking and financial sector is on the positive move upward,” Sophoan told Khmer Times.
Non-performing loan (NPL) at the banking sector and the microfinance sector last year was 5.4 percent and 6.7 percent, respectively, the NBC report said, adding that the NPL rates were still at a controllable level.
Cambodia currently has a total 58 commercial banks, four MDIs, 83 (non-deposit taking) microfinance institutions, 9 specialized banks, 16 leasing institutions, and 114 rural credit institutions.
