April 20, 2024

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[THE INVESTOR] Phnom Penh Commercial Bank is fast gaining a footing in the burgeoning Cambodian banking market, with its earnings soaring since it was acquired by Korea’s JB Financial Group two years ago.

JB, along with Seoul-based Apro Financial Group, acquired the then struggling Cambodian bank in August 2016. JB’s two units Jeonbuk Bank and JB Woori Capital hold 50 percent and 10 percent, respectively.

Up until the second quarter of 2016, the bank was suffering from a net loss of US$1.3 million. After it was acquired by JB Financial Group, it recorded a net profit of US$1.4 million in the third quarter. During the first three months of this year, its net profit more than doubled to US$3.7 million.

Its net interest margin -- a key indicator of a bank’s profitability -- surged to 4.82 percent in the first quarter of the year from 4.10 percent a year ago. The figure is almost triple the average of 1.66 percent among 11 banks in Korea.

Loans and deposits also soared to US$437.9 million and US$618.6 million, up 28.1 percent and 43.9 percent, respectively, during the same period. Its total assets increased 41.9 percent to US$737.6 million, becoming the 14th-largest bank in Cambodia.

“We aim to nurture the bank as one of the top three in Cambodia,” JB said in a statement. “We may have a long way to go considering the current gap with our bigger rivals but we are ready to compete with them head-on.”

In particular, JB is ramping up localization efforts to better appeal to local customers. Currently, all 18 of Phnom Penh Commercial Bank’s branches are being run by some 300 local employees. It’s also been working on forging partnerships with localized services only. Recently, the bank signed a deal with US card company Diners Club for jointly issuing premium credit cards, and teamed up with Cambodia’s largest mobile banking service provider Wing to augment its micro remittance service.

The bank is also pinning high hopes on Obank, JB’s new open banking platform that debuted in March with aims to share the banking group’s operational and regulatory expertise with smaller banks with limited branch footprints based on its fintech solutions.

“In Cambodia where the filtration rate of finance services is still low, operating a stable and advanced banking system has become our key competitiveness,” said a JB Financial official.

By Lee Ji-yoon (jylee@heraldcorp.com)