PHNOM PENH: A new chapter has been written in Cambodia's banking sector, thanks partly to a unit of Temasek Holdings.
A new bank formed by wholly owned Temasek unit Fullerton Financial Holdings and local partners was officially opened for business in an elaborate ceremony on Thursday.
About 320 guests, including senior Cambodian government and central bank officials and senior Temasek and Fullerton Financial staff, attended the event at Koh Pich's City Hall in Phnom Penh.
Cambodia Post Bank, as it is called, aims to serve the mass market and the very small businesses that proliferate in the country.
This is Temasek's first investment there and it also marks the maiden large-scale Singapore involvement in Cambodia's banking sector.
The new bank has a share capital of US$38 million. Cambodian firm Canadia Investment Holding holds a 50 per cent stake, Fullerton Financial has a 45 per cent share, and Cambodia Post, the remaining 5 per cent.
Canadia Investment also owns Canadia Bank, a leading commercial bank in Cambodia.
Fullerton Financial chief executive Gan Chee Yen said Thursday: "We see much potential in this market and we are very pleased to partner with two well-established, national brands."
Canadia Investment chairman Pung Kheav Se added: "Cambodia Post Bank will be very competitive in lending, deposit-taking and other financial services."
The bank has 11 branches in seven provinces, with five in Phnom Penh. It aims to expand to more than 30 branches across all 24 provinces within five years.
Gan noted that Cambodia's loan growth has averaged over 20 per cent per annum since 2008.
"The microfinance business model in Cambodia has been among the most successful in Asia. Yet the base for loans is still quite low," he added.
The country's economic fundamentals have also been promising, with gross domestic product growth expected to come in at 7.6 per cent this year and inflation to be below 5 per cent.
Cambodia Post Bank proved a hit on its official opening day, attracting both local and foreign interest. That is likely because it offered a one-day special promotion interest rate of 7.5 per cent for 12-month US-dollar fixed deposits - above the usual 6 per cent board rate in Phnom Penh.
– By arrangement with the ANN/The Straits Times –