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Acleda posts record profit of $166M, shares hit trading limit

Harrison White

Cambodia’s only publicly-traded commercial bank Acleda Bank (CSX:ABC) has posted a record annual after-tax profit of $166.67 million, as shares rose to KHR 13,300 hitting the 10% limit in daily trade after AFT purchase statement.

In a disclosure posted to the Cambodia Securities Exchange yesterday, the Bank posted an increase of 17% compared to an after-tax profit of $141.49 million in 2020. The company cited the record profit was mainly due to an increase in net interest income of 9.94%. Total assets hit $7.85 billion in 2021 up from $6.55 in 2020.

The Bank has also embarked on a digitalization strategy over the last two years to expand its self-automation capacity, as a result, the company reported a slight decrease in staff number as 2021, the Group has 13,674 employees down from 13,704 in 2020.

The Bank noted non-Performing loans at $122.94 million with a loss allowance of $22.58 million in 2021. The National Bank of Cambodia has stated it 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.  

ABC shares hit daily training limit 

Acleda Bank shares hit its 10% maximum daily trading limit yesterday after Cambodia Investment Review had previously reported that Acleda Financial Trust (AFT) planned 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.

It is believed this has caused a rush in the market from small investors, and with little to no sellers of the undervalued stock, has caused upward pressure.

The stock price hit KHR 13,300 yesterday in daily trade.

  

The stock was trading at KHR 10,300 a share on Monday (36% lower than its 2020 IPO price of KHR 16,200 a share) and was locked after an increase to KHR 13,300 a share at close of trade yesterday.

According to Article 17 of the Cambodia Securities Exchange (CSX) Market Operation Rules, the daily price limits for equity securities trading through the Auction Trading Method (ATM) shall be equal to the amount calculated by adding or subtracting 10% of the base price.

Daily price limit rules are widely used by stock markets across the globe with these rules particularly popular in emerging markets (such as Cambodia) as they give a time-out period during large price fluctuations and thus serve as a market stabilization mechanism.

Investors remain wary

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.

The Bank recently distributed a cash dividend for the financial year 2020 net profit after tax of $40.36 million to the shareholders who have not received it yet. This equated to approximately KHR 399.267 a share according to the official exchange rate or 2.46% of IPO price.

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