Foreign Banks Continue to Eye Cambodia

Taiwan's Mega International Commercial Bank became the 30^th Commercial bank to start operations in Cambodia when it inaugurated its first branch in Phnom Penh on Friday. While bankers have raised the issue that a glut of financial institutions is saturating the market, an official from the central bank said that more foreign banks would help attract investors from their home countries. "The banks have their own specialization. For example, a Chinese bank would come because more Chinese investors are coming, so they want to serve their own customers," said Ngoun Sokha, director general of the National Bank of Cambodia. "In the future, they might consolidate, but now we don't see that." Ms Sokha said that the NBC has also given an initial approval for Vietnam's Saigon-Hanoi Commercial Joint Stock Bank to enter the market. The bank, if granted a license, will be Vietnam's fourth bank to start operations here. "They are still working on the procedure of filing the documents," Ms Sokha said. Ms Sokha added that the Industrial and Commercial Banking license. Last month, Japan's Bank of Tokyo-Mitsubishi UFJ informed the central bank that it is interested in opening a representative office in Phnom Penh by March 2012. And both the Bank of China and Malay-sia's CIMB opened branches in Phnom Penh last year. In Channy, CEO of Acleda Bank, said that recent interest in the banking sector was due to a more optimistic outlook on the country's economy, estimated to grow by between 6 percent and 8 percent this year. New investors in the first half of this year compared to the same period in 2010 has more than tripled, according to Mr Channy. "I think if you look at the new investors, and the low savings to GDP [gross domestic product] ratio, the figures show very low access to financial services, so this is encouraging to new banks," he said. "Local banks can't do it on their own, so to avoid lending exposure, we must work with three or four banks to provide a large loan, funds that the new Taiwanese and Chinese banks can contribute."