Orix Investment in Acleda Seen as Exploratory

Orix, a Japanese financial conglomerate, will acquire about $11 million shares in Acleda Bank PLC, Cambodia’s largest bank, by the year’s end, officials announced Wednesday, although industry executives said the investment appears only exploratory and likely won’t make more than a ripple in the banking sector.

“ORIX is scheduled to acquire 6 percent of Acleda’s shares before the end of the year, having received permission for the share acquisition from the Central Bank of Cambodia,” Orix said in a brief statement posted on its website.

In Channy, CEO of Acleda, said Orix approached his bank about the investment and that Acleda was not actively seeking investors.

“We are a strong bank, and we’re never interested in investors, but if they come to us, we will talk,” he said.

Mr. Channy declined to disclose the deal’s market price, though it has been reported at between $51 million and $61 million. “I’ll let Orix tell you,” he said.

Mr. Channy said, however, that Orix’s 6-percent slice of the bank is not part of the 51 percent of Acleda that is owned locally.

“They are tapping into the foreign investors’ shares,” he said.

Acleda currently has four foreign investors: Hong Kong-based JSH Asian Holdings Ltd.; COFIBRED, a subsidiary of Paris-based BRED Banque Populaire; Dutch banking company Triodos; and the World Bank’s International Finance Corp.

But while the Orix deal makes it the first investment in Cambodia by a major Japanese financial institution, bank executives said it does not herald any great change in the country’s banking sector.

“It’s an interesting, strategic investor for Acleda, and I think the implication is good news for them…. But it doesn’t carry any particular implications for the industry,” said Grant Knuckey, CEO of ANZ Royal.

“An investment of their percentage is generally pretty exploratory and allows the investor to learn about the market. Whether this is followed by any further banking sector investments or Japanese banks converting to branches, you can’t draw that conclusion now.”

In the past five years, Japanese investment in Cambodia has been on the upswing, with growth doubling every year from 2009 to 2011, according to the most recent figures from the Japanese Embassy.

All three of Japan’s so-called megabanks have opened offices in Cambodia, with the most recent, Mizuho Bank, opening in July.

Based in Tokyo, Orix’s portfolio spans 27 countries with assets worth more than $69 billion. Its services include banking, corporate finance, life insurance and real estate.

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