Cambodia Investment Review
Bank SinoPac has unveiled its plans to acquire Amret Plc., a key player in Cambodia’s financial sector, in a deal valued at approximately $543 million. This move underscores Bank SinoPac’s strategic initiative to bolster its international presence and tap into Cambodia’s burgeoning economy. After a reportedly lengthy sales process, Bank SinoPac has agreed to acquire Amret at around 1.8 times its book value, which stood at $302 million at the end of 2023, a source familiar with the matter told Cambodia Investment Review.
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Bank SinoPac’s rationale for the acquisition is rooted in its strategy to capitalize on Cambodia’s robust economic growth trajectory, forecasted by the IMF to reach a compound annual growth rate of 6.3% from 2023 to 2028. Moreover, Cambodia’s attractive demographic profile further solidifies its position as a prime market for financial services. The transaction however is still subject to final NBC and Taiwan regulatory authority approvals.
Capitalize On Cambodia’s Robust Economic Growth Trajectory
Amret’s stature as Cambodia’s largest microfinance deposit-taking institution by total assets positions it as an attractive investment for Bank SinoPac. Having been a lender to Amret since 2017, Bank SinoPac aims to leverage this acquisition to expand its service network across Southeast Asia.
The shareholder composition of Amret, which includes esteemed international development finance institutions such as the International Finance Corporation (IFC) and FMO, underscores its commitment to sustainable and responsible investment practices. Bank SinoPac intends to uphold these principles post-acquisition, fostering collaboration with stakeholders to advance ESG initiatives and client protection policies.
SinoPac Aims To Capitalize On Amret’s Diverse Product Suite
With 150 operating branches across 24 provinces in Cambodia and total assets exceeding US$2 billion as of December 31, 2023, Amret offers Bank SinoPac a robust platform for expansion. The acquisition will unfold in three tranches, with Bank SinoPac acquiring 80% of Amret’s equity for approximately US$435 million in the initial tranche expected to be completed this year.
In addition to strengthening its overseas network, Bank SinoPac aims to capitalize on Amret’s diverse product suite, which includes both traditional banking products and emerging digital capabilities. By integrating Amret into its operations, Bank SinoPac seeks to enhance customer value and deliver more diversified and convenient financial services.
In 2023, Cambodia’s banking sector saw its slowest credit growth in two decades at just 4.8 percent, with lending reaching $57.6 billion. NBC Governor Chea Serey attributed the sluggish pace to delayed sector recoveries, particularly in hotels, restaurants, and wholesale businesses. Despite this, real estate and construction saw modest growth. Non-performing loan rates remained stable, with banks at 5.4 percent and microfinance institutions at 6.7 percent. Deposits surged by 13.1 percent to $47.9 billion, with total assets rising to $84.3 billion.
