CIMB aiming to be top 10 in Cambodia, targets US$100mil deposits

KUALA LUMPUR: CIMB Bank plc,
which aims to be among the top 10 banks in Cambodia over the next five
years, is targeting more than US$100mil (RM317mil ) in deposits and
US$90mil (RM285mil) in total loan size by year-end.
Its deputy
general manager and head of commercial banking Bun Yin said these
targets were commendable judging from the fact that CIMB started operations more than a year ago and was a relatively new player in the Cambodian banking landscape.
In an interview with StarBiz
on the sidelines of the CIMB Asean Conference recently, Bun said total
deposits for the first three months of this year had actually exceeded
the US$100mil mark and was confident loans and deposits would grow at a
strong rate.
He said deposits was up by 54% in the first quarter
of this year compared with the whole of last year, adding that loan for
the same period rose by about 17%.
He attributed the encouraging
growth to strong demand for loans as well as the ability of CIMB as a
regional banking group with presence in the region to attract business
from countries like Malaysia and Thailand which have investments in
Cambodia.
Bun said there were many Thailand and Malaysia-based
companies operating in Cambodia. Since CIMB also has a presence in
these countries, it can leverage on its regional network and provide
funding for these companies.
As for net interest margin (NIM)
growth, he said it was healthy with margins hovering between 4% and 5%.
NIM is a measure of the difference between the interest income
generated by banks and the amount of interest paid out to depositors.
CIMB Bank plc started operations in Cambodia in November 2010 and is a wholly-owned subsidiary of CIMB Group Holdings Bhd.
Its
areas of focus in Cambodia are the small and medium enterprise and in
retail banking which Bun feels it has good potential for further growth.
He
said the bank would also look into enhancing its technology
infrastructure in terms of electronic banking, automated teller
machines (ATMs) and cash deposit machines. Introducing sophisticated
products is another area which the bank would continue to look into to
meet the demand and needs of its customers.
The dual currency investment product is one such example and had been well received.
Bun
admitted that it was a challenge for a country like Cambodia to embrace
new technology and new products compared with traditional banking
involving deposits and loans.
Towards this end, he said
providing sufficient training to the bank's staff in educating
customers to understand the benefits of the products had helped in
addressing some of these challenges.
The bank aims to become the top 10 bank in the country over the next five years from the current 15th out of 30 banks there.
Unlike
some standalone banks, CIMB has the advantage of being a regional group
and could provide support from various fronts human resource/expertise,
businesses and customer base to its sister companies via its network in
Asean.
Apart from this, with a common platform, for example
allowing CIMB customers to conduct their ATM transactions within the
region where the group operates was a plus point that would put the
company on a stronger footing moving forward, he said.
As for
competition, Bun said the market was still largely untapped. “With a
population of about 14 million, out of which close to two million have
a bank account, and with 30 banks in the market, there is plenty of
room to grow,” he said.
The country, he said, offered good
incentives for banks. Foreign banks are allowed to hold 100% equity
stake in Cambodia banks and without the need for a joint venture, with
no restrictions on repatriations of dividends imposed.
Currency
risk was also minimal as transactions were in US dollars and hence less
fluctuations in exchange rates, he said. He expected the bank to open
four more branches this year, bringing the total to 11.
“CIMB
Bank in Cambodia will be one of the key players for the group in the
region but this will depend on market conditions,” he added.