Angkor Capital Downgrades to Specialized Bank, official says

Angkor Capital Bank is downgrading from a commercial bank to a specialized bank, a company official said yesterday, just weeks before a deadline passes for commercial banks to triple their minimum capital deposits at Cambodia’s central bank.

Chhourn Sarandy, a human resources officer at Angkor Capital, said he could not supply reasons for his bank’s decision to make the change, adding that no officers at the bank could comment.

“We are busy changing our bank from a commercial bank to a specialized bank,” he said.

The news of Angkor Capital’s transition coincides roughly with the year-end deadline from the National Bank of Cambodia, which has ordered commercial banks to triple their capital reserves at the NBC to $37.5 million. Specialized banks, which have no public depositors but can issue loans, are only required to keep about $7.5 million at the NBC.

Locally incorporated banks that are part-owned by financial institutions with a rating from a reputable credit agency do not have to increase their capital.

Tal Nay Im, director general of the NBC, said she could not confirm Angkor Capital’s plans.

“Now, [banks] are in the process of capitalization, and if they cannot come up with the capital they have to downgrade,” she said, adding that it’s still unclear how many banks might take that step.

“Wait until the deadline, because I cannot tell you in advance,” she said.

Experts have said some of Cambodia’s 30 commercial banks may not be able to meet the new requirement, forcing them to pursue other options including mergers, exiting the market, and downgrading to a specialized bank.

Dieter Billmeier, vice president for Canadia Bank, said becoming a specialized bank would create serious limitations for a bank, particularly in terms of capital.

“It would be a possible solution. But on the other hand, it would be quite bad for them because a specialized bank can’t take deposits. They can only give loans,” he said.

 

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