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Banking in Cambodia
A personal overview by John Brinsden OBE

Timeline
1975: The Khmer Rouge take control of Cambodia. Money is abolished and all banks are
closed.

1979: After the Khmer Rouge are forced out, the new government establishes the
National Bank of Cambodia (NBC) as the central bank and the Foreign Trade Bank as a
wholly-owned subsidiary of the NBC to provide commercial banking services.
Cambodia’s new currency, the Riel, is introduced in 1980.

1992–1998: The first privately owned commercial banks and foreign bank
branches/subsidiaries start to reappear initially with the requirement that the minimum
capital should be $5 million and the NBC should have a 15 per cent stake. By 1998 there
were 32 licenced commercial banks most of which were small local institutions with
some foreign private investors.
1998–2001: Major reforms to the banking system introduced under new Governor H.E.
Chea Chanto. New banking law classifies financial institutions into three categories: i)
Full Commercial Banks with a minimum paid-up capital of $13 million, ii) Specialised
Banks – minimum paid-up capital of $2.5 million, and licenced/registered Microfinance
Institutions (MFIs). Banks are allowed two years to conform. The number of Commercial
Banks halves to 16. The requirement for 15 per cent participation by the NBC is
abolished.

2002–Present: Reform process continues: the banking system initially suffers from over-
liquidity and lack of quality borrowers. New banks arrive with foreign investors
particularly from Australia, Korea and Japan.

The Foreign Trade Bank is privatised. The number of licenced Commercial Banks grows
to 24. In the face of inflationary pressures and a sharp increase in credit in 2008 the NBC
introduces measures to reduce liquidity and raises the minimum capital requirement for
Commercial Banks to $37.5 million (unless they have an ‘A’ rated, or above, ‘influential’
(see note 1) foreign bank as a shareholder). All banks must conform by no later than the
end of 2010.

It can thus be argued that the modern banking system in Cambodia is only 30 years old
since the Khmer Rouge set the clock to zero and abolished money in the mid-70s. When
viewed from this perspective it is a remarkable achievement to have come so far so
quickly and in spite of misgivings expressed in two influential reports issued recently by
the World Bank and the IMF, there are positive elements as well. Firstly, the NBC earns
high marks for its prudent policies and regulations. Secondly, more and more banks are
beginning to appreciate the benefits of transparency even to the extent of obtaining
international credit ratings.

Thirdly, the government’s steadfast adherence to the market, freedom from exchange
controls and unrestricted capital movements make it one of the most ‘business friendly’
environments in the region.

This having been said the score is ‘Good – but could do better’. A good regulatory
environment is only good if it is consistently applied and effectively enforced. The
problem for Cambodia is a chronic lack of skilled resources in the supervisory area which
results in some hesitancy in prosecution, and reality falling short of intentions. Some
progress is being made but there is still a way to go.

Transparency has improved considerably over the last decade but is still very mixed.
Generally those banks which adhere to international standards in disclosure have done
better in capturing market share than those who cling to traditional secrecy: an
increasingly educated public are now demanding more information and placing their trust
with those that provide it. One particular area of concern in an economic down-turn is the
health of the loan portfolio and reassurance that provisioning is adequate yet there are
still a few banks who insist that they have zero NPLs! (see note 2)
For a potential investor coming to Cambodia for the first time the banking system can be
somewhat bewildering as the number of new financial institutions has proliferated.
Unfortunately very few are internationally known or have strong banking backgrounds.
The NBC’s reaction to this has been to raise the licencing requirements both in terms of
capital adequacy and professional qualifications and this may cause some of the smaller
ones to close (as happened in 2000 – 2001), amalgamate (although this seldom occurs in
Cambodia perhaps due to the family-owned structure of many of them) or sell. Of the 24
commercial banks now operating the ‘top-4’ hold 70 per cent of total deposits and 73 per
cent of loans in the banking system. Only one bank, Acleda, can claim to a true
nationwide branch network in every province and town – most banks concentrate their
offices in the five major cities.

It is now easy to transfer money throughout the country and ATMs and PoS terminals are
springing up everywhere. Products and services are ‘plain vanilla’ compared to those
offered in more advanced centres and there is still no money market although some of the
bigger banks have set up informal arrangements with each other. The US$ is the most
widely used currency particularly in the bigger cities but it is possible to have accounts in
Euro, Aus$, Thai Baht, and almost any other major currency you wish as well as the
Cambodian Riel (see note 3). There are no restrictions on foreign exchange. In this still
very cash oriented society cash management and payrolls are important services,
particularly for manufacturers, wholesalers and distributors and a few banks have made
this a speciality.

The selection of a bank is obviously crucial and is well worth some research before a
decision is made. Some obvious questions would be:

- Transparency: does the bank conform to international standards in auditing and

disclosure? How freely is this information accessible? Does it have an international credit
rating? Does it comply with international conventions to avoid potential sanctions by the
regulators in the major international financial centres?
- Ownership and management quality?
- Does the bank have a good correspondent network with major international banks to
handle foreign transactions?
- Does your proposed business require access to services only in the major cities or more
extensive coverage in the provincial areas? Does it require any special services and how
willing is the bank to ‘tailor make’ them?

These are just a few considerations but the best way of course is to meet and talk. See
you in Cambodia!

Notes
1. ‘Influential’ is defined as holding at least 20 per cent of the bank’s capital and having unlimited liability.
2. ‘Non-performing Loans’ – loans which are more than 30 days past due.
3. The NBC’s attitude is to ‘let the market decide’ whatever currency it wishes to use and for the present
there is no official policy to de-dollarise the economy.
John Brinsden

John Brinsden OBE, is Vice-chairman of Acleda Bank Plc, which he joined in 1999 after a 38-year
international career with Britain’s Standard Chartered Bank.

ANZ Royal Bank

ANZ Royal Bank was established by Australia and New Zealand Banking Group Limited
(ANZ) and the Royal Group of Cambodia, one of Cambodia’s largest corporations. ANZ
holds 55% of total shares on issue and Royal Group holds 45%. ANZ Royal Bank has an
extensive network of ATMs throughout Cambodia and is the only bank that currently
provides internet banking in Cambodia. ANZ Royal Bank offers various banking
products and services for both personal and business customers.
Tel: +855 (0)23 999-000
www.anzroyal.com

Cambodian Public Bank

Cambodian Public Bank (Campu Bank) is a wholly-owned subsidiary of Public Bank
Group which is one of the largest and strongest domestic banking groups in Malaysia.
Campu Bank began banking in Cambodia in 1992 and today has a network of 15
branches. It has become the largest bank in Cambodia in terms of loans, assets and paid-
up capital. Campu Bank was awarded 'Bank of the Year in Cambodia' by The Banker,
London for five consecutive years from 2001 to 2005 and again in 2008 and 2009.
Tel: +855 (0)23 987-297
www.campubank.com.kh

Maruhan Japan Bank

Launched in May 2008, Maruhan Japan Bank is Cambodia's first Japanese commercial
bank. The bank provides comprehensive support and services to all businesses no matter
what their size – from small local enterprises to large multinational corporations, and
provides access to specialist expertise in many sectors including agriculture,
telecommunications, transport and tourism. The bank has multi-lingual business banking
specialists that can converse in Japanese, Korean, English, Vietnamese, French, Italian,
Chinese and Khmer.
Tel: +855 (0)23 999-010
www.maruhanjapanbank.com
As a fully licensed commercial bank with capital of USD$25m, MARUHAN Japan
Bank has been established to fulfill the banking needs of both international and
domestic business investors.
MARUHAN Japan Bank can provide comprehensive support and services to
businesses no matter what their size – from small local enterprises to large
multinational corporations. We are here to help.
In addition to an array of international standard banking products and services,
we can provide access to a wealth of specialist expertise in many sectors
including agriculture, telecommunications, transport and tourism. We also have
multi-lingual business banking specialists that can converse in Japanese,
Korean, English, Vietnamese, French, Italian, Chinese and Khmer.
We pride ourselves in providing tailored banking solutions to fit the needs of our
clients and know that one size doesn’t always fit all. By understanding your
business and what drives it, we can provide innovative solutions that enable you
to concentrate on what you do best – managing your business.
We invite you to discuss your business needs with one of our financial
specialists and look forward to welcoming you as a customer of MARUHAN
Japan Bank.

National Bank of Cambodia

The National Bank of Cambodia was established in December 23, 1954. After the
country gained the independence from France. www.nbc.org.kh
The Association of Banks in Cambodia
The official organisation to represent the country's private banking sector.
www.abc.org.kh

Stock Exchange Cambodia

Stock Exchange Cambodia is scheduled to open in 2009. The draft legislation on
corporate bonds is currently under process of finalising according to Prime Minister
Hun Sen. www.stockexchangecambodia.com

Securities and Exchange Commission of Cambodia (SECC)

SECC regulates the securities industry in Cambodia to contribute to socio-economic
development through capital mobilization from public/ securities investors to meet the
demand of financing for investors.
http://secc.gov.kh/english/

IMF Cambodia
http://www.imf.org/external/country/KHM/index.htm

IFC Cambodia
http://www.ifc.org/ifcext/eastasia.nsf/Content/Cambodia

World Bank Cambodia

www.worldbank.org/kh

Ministry of Economy and Finance

Ministry of Economy and Finance (MEF) is delegated by the Royal Government to
perform the mission of guidance and administration of the economy and finance of the
Kingdom of Cambodia in order to support economic development and to improve the
living standards of Cambodian people based on the principles of a free market economy
and social equality.

Ministry of Economy and Finance

St.92, Sangkat Wat Phnom, Khan Daun Penh,
Phnom Penh, Cambodia
Tel: 855-23-724 664 Fax: 855-23-427 798
Email: admin@mef.gov.kh
http://www.mef.gov.kh/
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Cambodian Public Bank commenced its business in Cambodia on 25 May 1992. It presently
has 15 branches: 6 in Phnom Penh, 1 each in Preah Sihanouk, Siem Reap, Battambang,
Kampong Cham, Takhmao, Poipet, Bavet and Phnom Penh Special Economic Zone and a
Service Branch each in Monivong Boulevard and Phsar Doeumkor, both in Phnom Penh. With
the trust and strong support from the public coupled with the commitment and dedication of
its staff, the Bank has grown to become one of the leading banks in Cambodia. In recognition
of its banking and management excellence, Cambodian Public Bank has been awarded the
Bank of the Year in Cambodia by The Banker, London for five consecutive years from 2001 to
2005, 2008 and again in 2009.

Cambodian Public Bank is a wholly-owned subsidiary of Public Bank Group which is one of the
largest and strongest domestic banking groups in Malaysia. The Group offers a wide range of
banking and financial services. As at 31 December 2008, the Group's shareholders funds stood
at USD2.92 billion, the third highest amongst domestic banking groups in Malaysia while its
asset size amounts to USD54.42 billion. Public Bank has 243 branches in Malaysia and
overseas banking operations in Cambodia, the People’s Republic of China, Hong Kong,
Vietnam, Laos and Sri Lanka.

Public Bank has over the recent years been accorded prestigious domestic and international
recognition for its banking and management excellence such as Best Retail Bank in Asia Pacific
and Best Retail Bank in Malaysia 2009 by the Asian Banker, Retail Bank of The Year – Malaysia
2009 by Asian Banking & Finance, Best Emerging Market Bank in Malaysia 2009 by Global
Finance, Best Managed Company 2009 by Finance Asia, Best Bank in Malaysia 2009 by
Euromoney, Alpha South East Asia, Finance Asia and the Banker, London, Corporate
Governance Asia Recognition Award 2009 by Corporate Governance Asia and Best Banking
Group, Malaysia 2009 by World Finance. Tan Sri Dato' Sri Dr. Teh Hong Piow, Founder and
Chairman of Public Bank has been awarded 5 personal awards in 2007, including ASEAN
Banker of the Year, Lifetime Contribution to Banking as well as a Recognition Award in
appreciation of his excellent achievement and contribution to the banking industry in
Cambodia by the National Bank of Cambodia for the past fifteen years in 2007.

Guided by its corporate mission "to be the most efficient, profitable and respected financial
institution in Cambodia", Cambodian Public Bank is committed to be the premier bank in
providing the most courteous and efficient service in every aspect of its business and being
innovative in the development of new banking products and services.

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ANZ Global

As one of the largest and most successful companies in Australia, our values help build a
sustainable future for our business, shareholders, staff, customers and communities. Our
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We employ more than 30,000 people and are represented in our primary markets of
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