Cambodia Investment Review
ABA Bank has announced robust performance in the first half of 2024, with significant milestones achieved across its digital finance solutions, corporate portfolio, and lending portfolio. Despite a slow economic climate, the bank has experienced noteworthy growth, reflecting its strategic initiatives and customer confidence. The bank’s net profit for the first half of 2024 reached $166.2 million.
In the first half of 2024, the number of ABA Bank’s mobile app users surged by 34% compared to the same period in 2023. This increase underscores the steady confidence in ABA’s digital finance solutions. Additionally, the bank successfully launched three new branches in Phnom Penh and Battambang and five self-banking spots named ABA 24/7, enhancing access to its modern products and services.
Highlighting their commitment to Cambodia’s growth and development, ABA Bank has never repatriated a single dollar in dividends. Instead, the bank has consistently reinvested its earnings into ABA, showing ongoing trust in its strategic direction. This reinvestment emphasizes ABA’s dedication to furthering Cambodia’s economic progress and stability.
Sustained Loan Growth Despite Economic Challenges
The bank’s total assets grew by 19% from the end of Q2 2023, reaching $12.3 billion. For the same period, ABA Bank’s loan portfolio saw a 14% increase, reaching $8.3 billion, while customer deposits grew by 20%, totaling $9.8 billion. The growth in both loans and deposits highlights ABA Bank’s resilience and ability to attract and retain customers.
“Our customer base expanded by an impressive 32% compared to the same period last year, reaching almost 4 million,” said an ABA spokesperson. “In the first semester of 2024, we processed 126% more ABA PAY transactions than in the corresponding period of 2023, highlighting the rapid digitalization of the Cambodian market.”
The spokesperson further noted that the bank has managed to sustain loan growth despite the economic challenges, emphasizing the importance of providing productive loans to the real sectors of the economy. “Our portfolio growth gives us confidence in future advances,” they added.
ABA Bank has continued its strong support for various sectors driving Cambodia’s growth, with loans primarily flowing to wholesale and retail trade, manufacturing, agriculture, and fishing. Micro, small, and medium enterprises (MSMEs) comprise the majority of the bank’s borrowers, representing 74% of ABA Bank’s total loan book.
Emphasizing the importance of competitive interest rates, the ABA spokesperson highlighted the bank’s vigilant credit assessment criteria and policies, which ensure the provision of suitable credit solutions to support the economy.
Driving The Digitalization Of The Cambodian Banking Industry
“During these challenging times, our dedicated teams across all sectors, from small business loans to commercial and corporate loans, have contributed significantly to our growth,” the spokesperson said. “Our focus on fostering the growth of MSMEs, which are considered the backbone of the Cambodian economy, has been a key factor in our success.”
The growth of ABA Bank occurs against the backdrop of increased costs from a competitive market and rising US interest rates. However, the bank’s strategic initiatives and commitment to supporting MSMEs have enabled it to navigate these challenges effectively.
As ABA Bank continues to expand its digital finance solutions and branch network, it remains committed to providing innovative and accessible banking services to its growing customer base. The strong uptake of mobile banking and ABA PAY transactions is a testament to the bank’s efforts in driving the digitalization of the Cambodian market, positioning itself as a leader in the country’s banking sector.