With their official opening Tuesday, Vietnam-based Sacombank joined the list of a long string of foreign banks already doing business in Cambodia, bringing the total number of banks operating in the country to 30.
Its opening comes only weeks after South Korea’s Kookmin Bank and the Bank of India opened up branches in Phnom Penh and also during a period of heightened political effort to increase trade relations between Cambodia and Vietnam.
“We know we are not early arriving in Cambodia. But we are early to bring Cambodia to the rest of the world,” said John Vong, deputy CEO of Sacombank. “We will use our network with banks around the world to increase trade, investment and money flows in Cambodia.”
Mr Vong added that Sacombank had not come to Cambodia to compete inside the country’s densely packed banking sector, but rather to collaborate with existing banks in order to facilitate trade between Cambodia and Vietnam.
According to government figures, bilateral trade between Cambodia and Vietnam is projected to rise to $2 billion in 2009, up from $1.62 billion in 2008.
“Sacombank is not here to fight for market share with [banks like] Acleda. They already have it,” he said. “We have come here to be more recognized globally.”
Officials at the bank’s launch on Tuesday said that Sacombank had ties with the International Finance Corporation, the World Bank’s private investment arm—which holds a 5 percent share in Sacombank—and the Asian Development Bank, which is implementing so-called trade finance facilities. Other banks in the region also have a stake in Sacombank.
Steven Higgins, CEO of ANZ Royal said Tuesday that his bank had bought an 8 percent equity share stake in Sacombank, perhaps a sign of vested confidence in its future.
With their stated aim of specializing in cross boarder trade with Vietnam, Sacombank has come to Cambodia at what may prove to be a promising time. This month has seen Prime Minister Hun Sen and Vietnamese Prime Minister Nguyen Tan Dung agree to boost economic ties at a business forum in Jeju, South Korea. It has also seen an agreement to merge the Vietnamese and Cambodian customs offices at the Bavet International Checkpoint in Svay Rieng province and the construction of an upgraded border checkpoint in Kampot province.
“Sacombank’s entry [to Cambodia] is part of the government’s plan to push ahead trade between Cambodia and Vietnam,” said Chan Nora, secretary of state for the Ministry of Commerce. “Its presence will bring bilateral trade between the two countries above $2 billion in 2010.”
Some have expressed fears that the proliferation of banks in Cambodia has saturated the sector and could hinder the National Bank of Cambodia from regulating efficiently. But NBC Governor Chea Chanto on Tuesday reiterated that the national bank would stick firm to its policy of encouraging foreign banks to come to the country.
“Cambodia is a good location for banking because it is an economy open for investment from other countries,” he said in at the launch ceremony for Sacombank.