Cambodia Investment Review

ABA Bank continues record growth while maintaining prudent loan-to-deposit ratio

ABA Bank continues record growth while maintaining prudent loan-to-deposit ratio

Harrison White

ABA Bank has continued its record pace of growth, posting a half-yearly net profit of $130.57 million, a 40% rise from the same period last year, while maintaining an 88% loan-to-deposit ratio and ensuring its 2.5 million customers’ funds are well managed.

ABA Bank is currently Cambodia’s number one private financial institution leading the market in total assets, gross loans, customer deposits, and profitability.

ABA Bank Chairman Yves Jacquot commented in his quarterly review that despite the general economic uncertainties, ABA Bank, with its solid financial fundamentals, remains a safe and stable institution on its upward trajectory.

“The continuous growth of the customer base and sound financial performance reflects the Bank’s strategy effectiveness and strong position in the financial sector,” he added.

To read more about ABA 2021 annual results click here.

According to ABA Bank, these results rest primarily upon the Bank’s leverage on its state-of-art digital banking and self-banking platforms.  

During the last quarter, the Bank has continued to improve its ABA Mobile banking application by bringing new convenient services and features.

In addition, they have been expanding their ABA 24/7 locations allowing consumers to make cash deposits or withdrawals, deposit checks from any local bank, and issue local and international cards free of charge.

Ensuring deposits are well managed

As global markets face ongoing economic uncertainties, a key agenda for both the National Bank of Cambodia and the Association of Banks in Cambodia has been increasing the sector’s loan-to-deposit ratios.

According to the latest NBC’s 2021 annual report, outstanding loans rose by 21% year on year to $45.7 billion, while customers’ deposits only increased by 15% to $38.5 billion representing a sector loan-to-deposit ratio of over 188%.

To read CIR Leader Talks with Chairman of Cambodia’s banking association click here.

ABA increased its overall customer base by 21% in the first half of 2022.

During the last six months, ABA Bank has been increasing its customer deposits from $6.3 billion to $6.88 billion, a 9% increase from the beginning of the year, representing an 88% loan-to-deposit ratio.

This is in comparison to some other large financial institutions, such as Acleda Bank, which is currently operating at a 99% loan-to-deposit ratio. According to conventional banking standards, an ideal loan-to-deposit ratio of between 80% to 90%.

More customers choose ABA Bank 

Global economy headwinds and interest rates growth led ABA to adjust interest rates for its deposit products accordingly. Specifically, ABA Bank has increased interest rates for the Current PLUS, Savings, and Fixed Deposits accounts in USD and KHR.

In addition, as more customers choose ABA as their bank, the overall customer base grew by 21% in the first half of 2022, with the number of ABA customers’ accounts reaching 2.5 million.

From a lending standpoint, ABA Bank has focused on providing capital for business and offering new products such as the ‘Salary Loan’. Using the Salary Loan feature ABA Bank customers​ with​ a​ payroll​ account are able to access​ emergency​ cash​ immediately against​ their​ salary.

ABA Bank welcomes the further development of the KHQR service to enable merchants to collect cashless payments from customers of all banks-members of Project Bakong.

During the second quarter of 2022, ABA Bank issued 11,534 loans worth $513.3 million, increasing the Bank’s gross loan portfolio by 6%, amounting to $6.1 billion in total.

ABA Bank was recently awarded the “Best Bank in Cambodia 2022” by the Euromoney financial magazine for the ninth consecutive year.

To read more about the award click here.

Launched in 1996, ABA Bank holds the long-term issuer credit rating “B+” with a Stable outlook from Standard & Poor’s Global Ratings Agency. It is a subsidiary of the National Bank of Canada that currently holds around $289 billion in global assets.

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