One of Cambodia’s leading commercial banks has posted $67.6 million in first-quarter after-tax-profit an increase of 42% from $47 million compared to the same period last year, while non-performing loans remained low at 1.41%.
ABA Bank earned a record net profit of $212 million for 2021, an increase of 40% compared to $151 million in 2020. To read more about ABA Banks 2021 annual results click here.
ABA Bank is a subsidiary of the National Bank of Canada, a financial institution with approximately $287 billion in assets and a vast network of correspondent banks worldwide.
Strong growth in lending
In the Banks quarterly statement Chairman Yves Jacquot outlined that in the quarter, 12,622 loans of $590.3 million were disbursed increasing the Banks gross loan portfolio by 8%, amounting to $5.8 billion in total.
In addition, ABA kept participating in the SME Co-Financing Scheme 2020 (SCFS), an initiative of the Royal Government of Cambodia to provide affordable loans to SMEs.
Under this loan scheme, the Bank disbursed loans worth $8.7 million for capital expenditure and working capital with a special interest rate of 7% per annum and a term of up to 7 years.
ABA’s deposit portfolio equaled $6.7 billion in the first quarter of 2022, representing a 6% increase from the last quarter of 2021. As more customers choose ABA as their bank, the customer base in Q1 2022 grew by another 8% and the number of ABA customers’ accounts reached 2.2 million.
Taking part in the socio-economic and infrastructure development, ABA delivered $56.9 million of taxes in the state budget in Q1 2022.
ABA’s strong commitment to the country’s progress can also be seen in employing almost 7,000 professional local staff at 81 branches and outlets, and constantly investing in staff training and development.
Expected credit losses rise
In the fourth quarter of 2021, the Bank commented it had restructured 13,905 loans with $710 million outstanding representing 13% of the total loan portfolio, however, did not update the figures in this quarter.
Cambodia Investment Review has previously reported that 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.
Total impairment losses for the quarter were recorded at $5.4 million as non-performing loans remained low at 1.41%.
The Bank stated it had incorporated Expected Credit Losses (ECL) overlay of $25.6 million as of 31 March 2022. “This represents additional ECL under stressed scenario if all multiple restructured loans with a grace period for principal and interest repayment as of the reporting date were classified under Stage 2 due to uncertainties under COVID-19 environment,” the report stated.
“ABA Bank has performed assessment of Covid-19 impact in light of the available guidance of the NBC and CIFRs and estimated expected credit losses based on the reviewed and enhanced ECL Model. The Bank will continue to monitor the potential impact of Covid-19 and will take all steps to mitigate any effects on its operations in future,” it added.