Extra $120M in Capital for ABA Bank
Extra $120M in Capital for ABA Bank
National Bank of Canada has injected an additional capital investment of $120 million to support the further growth of Cambodia-based ABA Bank.
The National Bank of Cambodia (NBC) disclosed the figure in its annual report shared with the Cambodia Securities Exchange.
The investment follows a request from ABA to the NBC in November last year for the sum of money. Signed off on January 2, the capital has boosted the bank’s solvency ratio by 21.11 percent.
“These ratios are not annualized and were calculated using the three-month period of profit or loss figures from Oct 1 to 31 Dec 2019,” the Bank explained in the report.
Yves Jacquot, chairman of ABA Bank, said this tranche will support the further growth of the bank, keeping its solvency ratio in full compliance with regulatory requirements.
“ABA Bank has demonstrated a strong growth within all main parameters, including total assets, deposits, and loans, as well as customer numbers,” he said in the report. He added that the bank’s total assets reached $4.39 billion last year, a 60 percent hike over the year before, while the deposit portfolio increased 55% to $3.40 billion and loan portfolio mounted up to $2.76billion, representing a 50 percent growth. Last October, the Montreal-based National Bank of Canada successfully purchased its last stake in ABA, bringing its total shareholding to 99.99 percent.
“Through this acquisition, the National Bank of Canada once again displayed its confidence in ABA and in the Cambodian banking industry as a whole,” Jacquot said.
“ABA successfully continues to implement its business strategy with a focus on digital finance products as well as on productive loans to businesses in real sectors of the economy. The bank implements a strong risk management culture strengthened by audit and compliance functions across its businesses,” he added.
In Q4 alone, the bank secured a solid $42.2 million in net profit and net profits of $127.41 million in the full 2019 financial year. These figures make the financial institution the most profitable commercial bank in the country, with an average equity ratio return of 31.3 percent as of the end of last year. The bank offers the entire spectrum of services to customer segments in the Kingdom. These cover SMEs, micro-businesses, and individuals – serving more than 730,000 customers through the extensive network of 77 branches, with advanced online banking and mobile banking platforms.
Despite these recent notable milestones for ABA Bank, its immediate future faces logistical challenges, brought about by the global COVID-19 pandemic.
In addition, world financial institutions, including the World Bank and Asian Development Bank are warning that Cambodia should brace itself for the detrimental effect on economic growth, predicting a sharp drop to 2.5 and 2.3 percent, respectively.
The ABA Bank could not be reached for a response to the predictions or how it anticipates the critical situation will further compromise its business operations.
