CIMB has once again won the 2019 Cambodia’s Best International Bank award by Asiamoney, making it the second year in a row that the bank has received the prestigious award.
Chief executive officer, Bun Yin attributes the milestone achievement to a combination of an ongoing philosophy he and his team practice. As well as the adherence to risk awareness when it comes to their loan portfolios and the development of the bank’s most important asset, its staff.
In a conversation with Khmer Times, Yin shared his strategies and thoughts on what has lead the bank’s portfolio to observe steady growth and in certain areas even exceeded the targets set in 2019.
Breaking records in 2019
“Our profits before tax has seen a staggering 67 percent year-on-year growth which has exceeded our year-end target at 26 percent,” said Yin, highlighting that the growth has been their best result to date.
CIMB Cambodia’s loan portfolios have continued to see healthy growth, up by 28 percent year-on-year while deposits have grown 15 percent from 2018. The bank has also maintained its position as one of the top 10 banks in the country; while in terms of profitability the bank has already secured a place among the top five.
Operation volume has also recorded a growth of 20 percent as of November 2019 compared to the previous year with their customer base increasing by about 15 percent.
“Despite the tremendous growth, we are maintaining the non-performing loan ratio at 0.15 percent which is among the lowest in the Kingdom’s banking industry,” said Yin.
He went to say that this reflects the bank’s good risk management policy and prudent practice. “In addition, we have now complied with all regulatory requirements including a minimum of 10 percent of our loan book in Khmer Riel (KHR),” he added.
Furthermore, the chief executive officer said that the successful launch of a mini branch in Exchange Square Mall was a reflection of the bank’s ability to adapt to a rapidly evolving market.
In Cambodia, the banking sector has expanded with more players penetrating the market with current numbers amounting to 43 commercial banks. This resulted in a challenge that came in the form of intense competition as well as human resources.
“Our challenge was to grow the business in the face of competition while maintaining full compliance with stricter regulatory requirements. The major ones were solvency, liquidity coverage and KHR loan ratio,” Yin said.
The minimum solvency ratio to be maintained increased to 17.50 percent while the liquidity coverage ratio for banks to maintain is at 100 percent.
In addition to complying with key financial ratios, Yin and his team worked hard to comply with newly introduced technology regulations. The prominent ones being Fast And Secure Transfers (FAST) and the Cambodian Shared Switch (CSS) which saw the bankrolling out CSS services on a limited basis by the end of 2019. The services will be rolled out bank-wide once everything is in place.
FAST Payments are an electronic payment channel launched by the National Bank of Cambodia in cooperation with commercial banks and deposit-taking microfinance institutions (MFI) in Cambodia.
Introducing new products
“We introduced the Unsecure Personal Loan in March last year,” Yin said. The loan service was the first product from CIMB Cambodia that allows individual customers to apply for loans without pledging collateral security.
Yin explained that customers can get the loans in as soon as three working days and can repay the bank anytime without incurring a penalty, this has proven to be popular among their customers because of its flexibility.
The end of 2019 saw the bankrolling out another service, the BizChannel Mobile App. The chief executive officer says that adapting the Group’s successful app to use in Cambodia has been a challenge but a necessary development to recognise that digital banking and associated apps are crucial factors for doing business in modern-day Cambodia.
“The app is being rolled out in stages and during the first stage, it will give business owners access to local accounts and CIMB business accounts across Asean meanwhile the second stage will follow shortly and provide the bank’s customers access to a wide range of banking services including convenient payments to new and existing business partners,” said Yin.
“Looking back, 2019 has been successful beyond our expectations with healthy growth in all areas of the business and steady progress towards our strategic targets,” highlighted Yin. He went on to point out that despite some potential challenges in 2020, he remained confident that the bank will maintain the forward momentum of the last few years. “CIMB Cambodia will always take a prudent approach to expansion,” Yin stressed the bank aims to grow 20 percent of pre-tax profit while maintaining asset quality with a projected ceiling of non-performing loans at 0.75 percent.
Yin also expressed optimism with the country’s gross domestic product as it is expected to grow between 6 or 7 percent, which will bode well with the banking sector.
“2020 will mark our 10 year anniversary of operations in Cambodia.
“It has been an exciting journey and I am confident that as we look forward to the next 10 years, there will be many challenges and exciting developments to come,” said Yin.