CIMB Cambodia, one of the leading financial institutions here, remains upbeat and trudges on, planning and gearing up for better days ahead while navigating the challenges posed by the coronavirus pandemic.
The economic fallout of the pandemic has been severe. Banks and other financial institutions are among the hardest-hit businesses in the Kingdom.
Bun Yin, CEO of CIMB Cambodia, says “Like everybody else in the financial sector, CIMB Cambodia has to contend with disruptions and other adverse effects of the pandemic.
“At the beginning of the year, our business operations were carried out as usual. And then everything changed with the onset of the pandemic. The unforeseen COVID-19 pandemic has created an adverse disruption to our business operations, as well as the global economy overall and the banking sector in particular,” he pointed out.
“The unprecedented COVID-19 pandemic was obviously completely beyond expectations and has caused disruption to ongoing business projects. Some have been temporarily delayed in order to ensure safety of staff, consultants and contractors,” he added.
According to him, the unforeseen circumstances forced them to review their growth prospects for the rest of the year.
“Due to COVID-19, we are reviewing the growth prospects for the remainder of the year. We have redirected staff resources to support affected customers and remain prudent on new lending to affected sectors. As a result, we foresee that our financial performance may not be able to meet our year-end targets,” he conceded.
“Although we are managing our business prudently due to the uncertainty, not knowing when this pandemic will end, an impact on our profit target may be unavoidable,” he added. Yin noted that there are also other challenges they are facing in addition to the COVD-19 problem.
“The biggest challenges for me would be on educating our customers to be familiar with new infrastructure/banking systems and the upskilling of talent/banking knowledge of our local staff. This is in addition to the COVID-19 pandemic that’s plaguing the nation,” he said. But despite all of that, Yin hinted optimism and said they are well-prepared to face the challenges ahead with a sound strategy and focus on quality and stability.
“We are unsure how long COVID-19 will remain. Our strategy is to stay vigilant and enforce our readiness to adapt to the changing environment. Growth will be moderated as we focus on quality and stability,” he stressed.
To adapt to the situation, he said, they are focusing on enhancing their digital banking proposition alongside the implementation of safe practices and social distancing for customers.
Yin said they are not only focusing on business, but also on ways to help clients affected by the pandemic. Based on customers’ requests, according to him, approximately 10 percent of their loan portfolio has been rescheduled. These cover both individual and business loans.
“We adopted the regulations put forward by the National Bank of Cambodia on the loan restructuring policy. Based on customer requests, we are giving priority to four sectors, namely: tourism, construction, garment and transport. In addition, we will also extend our support to CIMB customers who are experiencing financial difficulties in other sectors,” he noted. Yin expressed optimism that they will come back stronger with support from the Cambodian Government.
“The Government has been very supportive during this difficult period with measures put in place to support the local economy,” he pointed out.
These, according to him, include lower interest funding for SMEs, R&R regulations to lower reserve requirements, reducing capital buffers, relaxing taxation such as withholding tax, and supporting free trade agreements to promote larger exports to China.
“With all these stimulus support from the Government (Ministry of Economy and Finance and NBC), we believe that CIMB Cambodia, as well as the banking sector in general, will be able to better weather the COVID-19 crisis,” he stressed.
CIMB Cambodia is part of Malaysia’s CIMB Group, which is one of the largest Asian commercial bank. The Group also has the distinction of being one of the world’s largest Islamic banks. CIMB Cambodia opened their first branch in Cambodia in 2010. Since then, it has grown to be included in the top ten in terms of loans and deposits. In terms of profitability (ROE), it is also already in the top five among close to 50 licensed banks in the Kingdom. (Source: NBC)
Because of that, CIMB Cambodia was able to achieve one of the highest year-on-year growth rates, and also one of the industry’s lowest NPL ratios.
CIMB Cambodia achieved this growth while adhering closely to a strategy of expanding within its means. This strategy allowed the bank to achieve feats seldom seen in the Cambodian banking sector: One of the highest growth rates coupled by the one of the lowest non-performing loan ratios. CIMB Cambodia has been recognised by Asiamoney as Cambodia’s Best International Bank for two consecutive years in 2018 and 2019.
CIMB Cambodia’s exponential growth was made possible by a variety of factors, including a high-powered management team; focus on developing its manpower, including sending staff to train in Malaysia and other countries as well as strong backing from CIMB Group.
CIMB Cambodia also has the advantage of being run by a Cambodian CEO with deep understanding and knowledge of the local banking and business environment.
“As a Cambodian CEO running a Malaysian bank, the advantage is a deep understanding of the local business environment. Alongside this, we are able to leverage on our Group’s resources to support our customers and address new challenges as they come. CIMB Group provides opportunities for knowledge and new technology transfer from Malaysia to Cambodia,” Yin pointed out.
“Today, with the rapid progress of the 4th industrial revolution, banking operations are becoming more and more complex and benefitting from the Group’s expertise and experience in relevant areas, such as digital banking, is a great positive. Support from CIMB Group in implementing BASEL III is essential and will help strengthen our position here,” he added.
Currently, CIMB Cambodia offers a wide range of products and services to customers of all segments. These include Preferred Banking, Savings Plus Account, Junior Savers Account, Current Account, Escrow Account, Foreign Currency Accounts, Fixed Deposit, ATM Regional Link, Internet Banking, Credit Card, Remittances, Cash Management, Payroll Account, Home Loan, Personal Loan, Car Loan, Term Loan and Business Loan. CIMB Cambodia currently operates 14 branches and 39 ATMs throughout Phnom Penh and major provinces, including Siem Reap, Battambang, Preah Sihanouk and Kampong Cham. It currently serves more than 23,000 corporate and individual customers.