Cambodia’s economy continues to be a hot prospect for future business investment. However, before opening a new business venture in a place like Cambodia, it might be wise to gather intelligence data about the country and how to do business in that country. Moreover, one sector a wise foreign investor might want to know about before doing business in a place like Cambodia is the relative health of their banking sector industry.
This article introduces the potential investor to Cambodia’s banking industry including its immediate short-term outlook, who governs the industry, and the top commercial banks in Cambodia.
Cambodia Banking Sector – Short-Term Risk Assessment
In its country risk report of Cambodia filed for December 2010, the researchers of Economist Intelligence Unit suggested that the Cambodian banking sector was stable but could face serious risks in 2011-2012 due to a possible collapse of property prices since their peak in mid-2008.
The reason for the warning caution given by EIU forecasters stemmed from the fact that the Cambodian banking industry poured large amounts of loans into real estate. It is expected that non-performing loans will rise, leading to a less than encouraging short-term risk assessment for Cambodia’s banking sector.
Cambodia’s Banking Industry – Governed by the National Bank of Cambodia
Cambodia’s banking sector is governed by the National Bank of Cambodia (NBC) which acts as the country’s central bank institution. According its official website, NBC was first established in 1954 after Cambodia received independence from French colonial rule.
NBC continued as the country’s central bank until it was closed by the rebel Khmer Rouge forces in April, 1975, but re-established itself in 1979 when the Khmer Rouge was deposed by Vietnamese forces. As of April 2009, the National Bank of Cambodia provided oversight for 27 commercial banks, 12 microfinance institutions, and five specialized banks.
According to the 2009 annual, three of Cambodia’s top commercial banks included the Foreign Trade Bank, ANZ Royal Bank, and the Union Commercial Bank. The Foreign Trade Bank of Cambodia is a joint private/government owned bank that has serviced clients since 1979. Founded in 1994, Union Commercial Bank is a privately held bank which has a particular expertise in Cambodia’s well-established garment industry.
ANZ Royal Bank has only been operating since 2005 and is a joint venture of Australia and New Zealand Banking Group (ANZ) and the Royal Group of Cambodia led by young Khmer entrepreneur Khit Meng.
Other top banks included Vattanac Bank, Cambodia Commercial Bank, and Canadia Bank. Annual reports for the 27 commercial banks under supervision of the National Bank of Cambodia can be obtained from the NBC official website under the heading “supervision.”
Sources:
Owen, N., & Richards, D. (2010). Cambodia. Economist Intelligence Unit – Country Risk Service.November 18, 2010.
Staff Writer. (2010). National Bank of Cambodia Website.
(2009). Union Commercial Bank 2009 Annual Report.
(2009). Foreign Trade Bank 2009 Annual Report.
(2009). ANZ Royal Bank 2009 Annual Report.
(2009). Cambodia Commercial Bank 2009 Annual Report.
(2009). Vattanac Bank 2009 Annual Report.
(2009). Canadia Bank 2009 Annual Report.
Eric Coggins - Eric Coggins is a doctoral student at Regent University's School of Global Leadership & Entrepreneurship. From 2000 to 2006, he worked as ...
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