ACLEDA expects assets to hit US$1 billion by year's end

Written by May Kunmakara

Tuesday, 13 January 2009 Phnom Penh Post

The homegrown bank has predicted its $690 million net worth will almost double in 2009, bucking the global credit crisis hitting international bank. Photo by: May Kunmakara ACLEDA CEO In Channy at the opening ceremony for a new branch in Kampong Thom. ACLEDA Bank expects its assets to climb to US$1 billion by year-end, despite the global financial crisis, the company's leaders announced at a branch opening Friday. Total assets for 2008 reached $690 million, ACLEDA Chief Operating Officer In Channy said at a branch opening in Kampong Thma commune, Kampong Thom province. "We are the retail bank that offers a full range of services and products to the agricultural sector. Our nationwide branches cover all classes, from the smallest to the largest loans," he said. According to In Channy, the global financial crisis and economic downturn hasn't hurt ACLEDA's operations, as the bank is not heavily exposed to the real estate sector, which was hard-hit by the slowdown. According to the chief executive, the bank loaned $463 million last year, with only eight percent being used to buy property. "We aren't concerned about the real estate slowdown. We are planning to recruit 1,000 employees for 2009 and open 18 new branches to add to the current 226 branches," he said. "The bank has only 0.4 percent non-performing loans for 2008, and the figure has stayed stable since 2002." ACLEDA will also expand ATM coverage to more locations throughout the Kingdom to give greater access to their 180,000 ATM cardholders nationwide. The bank will add another 45 ATM machines to local districts and communes. According to Leng Meng, the manager of the new branch, 50 percent of villagers in the district were using his bank's services despite competition from other, more low-risk institutions. "Even though there are a lot of NGOs and microfinance institutions coming here, we are not losing customers because they trust us," he said. "Even after they have repaid their loans, they still stay with us," he said, adding he hoped to increase customer numbers by between 15 to 20 percent this year with the new branch. WE [ACLEDA] AREN'T CONCERNED ABOUT THE REAL ESTATE SLOWDOWN Kampong Thom provincial Governor Nam Tum welcomed the new branch, saying that it would benefit both the poor and business people, giving businesses the ability to raise their capital and poor people the means to improve their living standards. Risky investments However, he warned that many who take out loans were still not aware of how to invest safely, and investing in property in particular without the ability to repay the loan concerned the government. "I suggest that before people get a loan, they should properly consider what they will use the loan for, so they avoid using it in the wrong way, such as buying land for sale," he said. "This is a risky investment while the global economy is in the problem situation that it is in, and they may not have the ability to repay the loan," he added. Nam Tum also said he was concerned that some people were using copied land titles to borrow money from financial institutions, and warned authorities will take action against anyone who produced fake land titles. Leang Lo, a business person based in Kampong Thom province, told the Post he had borrowed $7,000 from ACLEDA Bank since early 2008 to upgrade his business and had received advice from the bank on how to safely manage the money. He said that before he got the loan, bankers required him to deposit collateral in the bank - in particular, a land title - and explained the risk of investment. "This is the first time I have borrowed money from a bank, and although it is a large amount, I believe I have the ability to repay the principal and interest of $200 per month, as my business can earn around $500 per month. So far, I have never been late with repayments," he said Leang Lo says he uses the loan not only to run a business, but for farming and to support his children's studies.