Cambodia Investment Review
Despite an ongoing economic downturn for financial institutions in Cambodia, Campu Bank has showcased significant resilience by achieving the highest year-on-year growth among banks in Cambodia. With a significant 39% increase in net profit from $44 million in 2022 to $62 million in 2023, Campu Bank’s performance stands out in a challenging financial landscape. This accomplishment is particularly noteworthy as the average growth rate for all banks in the country dropped by approximately 60% for the year.
According to the NBC annual report, which employs its own specific guidelines for assessing banks’ financial performance, Campu Bank’s success showcases its strong operational framework and adaptive measures in a volatile market. In an exclusive interview with Cambodia Investment Review’s Leader Talks, Mr. Ong Ming Teck, CEO of Campu Bank, provides insights into the strategies that drove this success and the future outlook for the bank and the Cambodian banking sector.
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“Campu Bank’s success in 2023 is a testament to our unwavering commitment to strategic growth and sound banking practices,” stated Ong Ming Teck. “We have focused on expanding our retail banking business, which includes consumer banking, SME lending, bancassurance, and international banking. This diversified approach has enabled us to capture growth across various segments.”
Diverse Financing and Affordable Housing
Ong emphasized the importance of Environmental, Social, and Governance (ESG) considerations in the bank’s operations. “ESG is at the heart of our strategy. We believe that sustainable growth is only possible through responsible ESG practices, which ultimately deliver long-term value for our stakeholders,” he explained. “Our initiatives include maintaining strong corporate governance, enhancing risk management practices, and ensuring data security.”
Campu Bank’s loan growth was particularly notable, with gross loans and advances increasing by 10.4% to USD 1,403.59 million. Financing was well-distributed across sectors such as household essentials (31.11%), wholesale and retail (25.17%), and construction (13.17%). Additionally, the bank achieved a loan portfolio in Khmer Riel amounting to KHR 748.80 billion (USD 183.3 million), surpassing the NBC’s 10% target with a 13.06% share. Despite a 9.7% decline in customer deposits to USD 1,337.41 million due to weak economic activities, Ong remained optimistic. “Our focus on diversified financing and strategic initiatives has helped us mitigate the impact of decreased deposits,” he said.
The bank also made significant strides in affordable housing, with approved financing reaching USD 10.3 million. “Supporting affordable housing is crucial for economic stability and community well-being,” Ong noted. “We are committed to providing financial solutions that enable more Cambodians to own homes.”
Navigating Economic Uncertainty
When asked about the current state of the Cambodian banking sector, Ong provided a balanced perspective. “The global environment remains uncertain due to ongoing economic and political challenges. However, Cambodia’s economy is expected to remain relatively stable, driven by increased demand for exports, tourism, and domestic consumption,” he commented. “The government’s Pentagonal Strategy – Phase I for growth, employment, equity, efficiency, and sustainability is a robust framework for future development.”
Looking at credit growth, Ong projected cautious optimism. “While global economic uncertainty may slow lending growth in the short to mid-term, we will continue to finance key sectors such as household and personal essentials, wholesale and retail, and SMEs,” he explained. “We are also collaborating with affordable housing developers to offer special financing schemes for the low to medium-income segment, without compromising on our stringent loan assessment standards.”
Strategic Vision for the Future
Discussing the future, Ong expressed confidence in Cambodia’s economic recovery. “The Ministry of Economy and Finance forecasts a 6.0% growth rate for 2024, with continued growth in subsequent years,” he said. “The free trade agreements under the Regional Comprehensive Economic Partnership and the Cambodia-China Free Trade Agreement will significantly boost our economy.”
Campu Bank remains committed to promoting the use of Khmer Riel and supporting the SME sector. “SMEs are the backbone of our economy. We tailor our loan products to meet the needs of SMEs for working capital, business expansion, and affordable housing,” Ong emphasized. “Our goal is to contribute to nation-building and support the government’s vision of achieving ‘upper-middle income economy’ status by 2030 and ‘high-income country’ status by 2050.”
In addressing what the banking industry and regulators can do to ensure sustainable growth, Ong was clear. “The banking sector must continue to adapt to evolving economic conditions and regulatory environments. Proactive strategies, vigilant risk management, and a commitment to ethical banking practices are essential for sustainable growth,” he stated. “At Campu Bank, we are dedicated to creating value and supporting the financial needs of our community.”
