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Acleda Financial Trust to purchase company stock

Harrison White

Acleda Bank’s (CSX:ABC) largest shareholder – Acleda Financial Trust (AFT) – has said it plans to purchase an undisclosed number of shares over the next five years in a statement released to Cambodia Securities Exchange.

The statement read following the decision of their Board of Trustees and regulators, the AFT will buy the shares on the CSX from 2022 to 2026 based on their internal budget plan and 5-year strategy.

Cambodia Investment Review contacted AFT but was not provided any additional information on the number of shares nor a specific timeframe. AFT currently holds 25.74% of total company shares.

The AFT mission statement says it shall pursue directly and exclusively the aforementioned objectives and shall act altruistically and shall not primarily pursue objectives for its own private commercial interests.

Acleda continues to trade at record lows

Cambodia Investment Review had previously reported that the company’s stock was considered ‘undervalued’ by investors after the company approved staff to sell their shares on the open market last year.

It is continuing to trade at record low levels of KHR 10,300 a share (36% lower than its 2020 IPO price of KHR 16,200 a share) despite record profits expected in 2021.

Investors have been wary of the stock after July last year when the company allowed more than 11,000 members of the ACLEDA Bank staff association to partially sell their shares on the open market.

Industry insiders have cited the investment hesitancy is mainly due to the potential for ongoing selling pressure as an additional 89 million shares (20% of total company shares or four times is IPO) may need to be absorbed into the open market over the next few years.

Acleda Financial Trust
CSX Chart: ABC shares have dropped 39% over the last 12 months from KHR 17,000 in Feb 2021 to KHR 10,300 today.

Record profits expected for 2021 despite COVID impact

Full yearly profits for 2021 will be released this month, according to the company’s third-quarter report the Bank had made an after-tax profit of $120.12 million in the first nine months of 2021 – an increase of 22% from $98.36 million over the same period last year.

The Bank expected $18.44 million of impairment losses over the same nine months on loans and advances, deposits and placements with other banks, and other receivables.

The National Bank of Cambodia will continue allowing financial institutions to restructure loans until June 30 this year – but will now classify them as non-performing after multiple restructures.  

It added that loans that are deemed ‘non-viable’ shall be classified as a loss at the full amount of loan value. For customers that have not been restructured before and are impacted by COVID-19 this shall not be classified as non-performing.  

Acleda Bank’s NPL rate was listed at 2.64% in Q3, 2021 up from 1.24% in 2019, non-performing loans are defined as “interest is due or unpaid for 90 days or more”.

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