Canadia Bank, the largest local bank in the Kingdom, celebrated its 24th anniversary on November 11. The B2B team takes the opportunity presented by this joyous occasion to sit down with Sokleng Hong, Head of Corporate Banking, and discuss Cambodia’s financial sector and AEC integration.
Canadia Bank was established on November 11, 1991, and became privatised in 1998. It offers various financial services through its Head Office in Phnom Penh and its 50 branches across the country. With a worldwide network of banking relationships and a solid base of local and international customers, the bank holds commanding market shares in loans as well as deposits.
In 2009, the Canadia Tower (also known as the OCIC Tower) opened its doors. Located at the heart of Phnom Penh’s banking district, the monolithic, glazed building holds Canadia Bank Headquarters. In 2014, the bank opened a Representative Office in Shanghai and its subsidiary, The Overseas Cambodia Investment Corporation (OCIC), completed the Stung Meanchey Bridge.
B2B: Can you give us an overview of the financial sector in Cambodia?
Sokleng Hong: Due in large part to the implementation of international standards and policies, Cambodia’s banking system continues to gain strength, creating an increasingly sound, stable and safe banking environment and is well integrated into the regional and global banking system.
For the past three years banking institutions have maintained a rapid rate of growth, including expanding their branch network across the country particularly to the rural areas. This has had a direct and dramatic effect on supporting the country’s strong economic development and improving access to financial services for more Cambodians.
B2B: ls Canadia Bank undergoing any internal changes in light of the upcoming membership into the ASEAN Economic Community (AEC)? What is the bank doing to adapt to changes ahead?
Sokleng Hong: While Canadia Bank is certainly taking AEC integration seriously, our focus is on being the best and safest bank in Cambodia. This guides and informs how we develop and execute our strategy, and where and how we mobilize resources. We believe that in order to do so our focus needs to be on strength, stability, reliability and trust. Our customers know that we will always do the right thing, especially in the long term. We know our customers and their needs, and for twenty four years we have made their needs our priority.
To adapt and remain responsive to market needs, Canadia Bank continues on its successful path of transformation. Nurturing collaborative teamwork in a performance-driven team of professionals is critical to ensure the long-term sustainability of the bank. The demands that we place on our team require strong senior leadership and expertise to lead, which helps ensure that internal changes are implemented successfully.
B2B: In terms of safety and online/mobile services, how developed is the banking sector in Cambodia?
Sokleng Hong: The growing demand for mobile banking services is driving the sector to demand security and safety. Sector wide, banks are devoting significant resources to ensure that online and mobile banking activities are secure, safe, and reliable. Most banks that have internet and mobile services have committed resources to enhance security. Canadia Bank continues to commit resources to further developing and enhancing our internet and mobile banking business. The demand we see is strong, and the strong growth in this area will continue. We are excited about this because this demand drives us to innovate and offer the best for our customers.
B2B: How does credit appraisal for loans currently work in Cambodia and how do you think it should work?
Sokleng Hong: Credit appraisals for loans focus on the Five “C” method. The Five “C” method examines the borrower based on Character, Capacity, Capital, Collateral and Conditions. While this appraisal method covers the basic and core attributes, it does not provide a comprehensive view of the borrower, being fair to both the borrower and the lender. Many factors can affect the borrower’s ability to repay loans.
At Canadia Bank in addition to the Five “C” method, we do a thorough and comprehensive assessment, which includes an understanding of external factors such as the industry in which the borrower’s business operates, credit references and economic conditions. Appraisals should be expanded to consider what political and economic conditions are prevalent, the weight and importance that culture may play in assessment, technological advancements and changes, legislation and regulations that affect the industry that may impact the business directly, and environmental considerations or concerns. Not only does considering these areas help the lender understand the industry and market better, but it allows the lender to develop a strategic perspective in how it grows and manages its overall portfolio of loans, and help give guidance to the lender to better differentiate between industries.
B2B: What advice will you give someone trying to decide what bank to choose for his/her business?
Use a widely known bank. You will always want to use a bank that is responsible with its own business and has concern for financial stability. Choose a bank that will protect and keep your deposits safe. A high level of service and attention to the customer is an important criteria as well. You will want to work with a bank that is happy to have you as a customer and serve your interests.
Determine your money habits. Before making any decision on which bank to use, decide what you prefer so that you will know which bank is right for you. Things to consider are ATM usage, low account balances, wealth management accounts, online and mobile banking bill pay, credit cards and deposits. Another factor to look at is competitive interest rates for both savings and loans.
Consistent with our values and strong reputation, and recognising the need for the right products and services, Canadia Bank serves its customers with clear purpose, so that they will grow and create opportunities for future generations. With our knowledge of the local market, reliable history and range of products and services, we provide the best support to individuals and businesses, allowing them opportunities. Canadia Bank remains the safest bank in Cambodia, and our customers and banking partners, local and global, are assured that we are always here to serve their financial needs.