Standard Chartered, one of a handful of foreign bank branches in Cambodia, said Thursday it will no longer operate here as a full-service bank.
The bank’s Cambodia branch “is currently in discussion with the National Bank of Cambodia on its proposal to restructure the bank’s business to that of a representative office,” according to a statement issued Thursday from Standard Bank’s Singapore office.
In a circular to some Standard Chartered Cambodia customers and obtained by the Cambodia Daily, the bank said it would “close our onshore business 1st May 2002.”
“We have just received the formal decision of our regional management that our operations in Cambodia are to be restructured to be a representative office,” the circular said.
A Phnom Penh businessman who spoke on condition of anonymity confirmed that the bank had said it would finish operations in May.
“The bank’s move comes as a result of a strategic review of its operations in the emerging markets network coming off a very challenging global business environment in 2001,” the letter from the Singapore office said.
“We kindly ask that you start to look into new banking arrangements,” the letter said, recommending Malayan Bank Bhd (Maybank) or the Cambodia Public Bank as alternatives.
A spokesman for Maybank declined to comment on the closing of Standard Chartered. Representatives of Cambodia Public could not be reached for comment Thursday afternoon.
Standard Chartered officials declined to comment on the letter, saying it was company policy not speak to reporters.
The letter made reference to the downturn in the global economy, not Cambodia specifically.
“The cost cutting measures have included a number of our operations in many different countries,” the letter said. “As yet, the new structure formally is not yet completed with the National Bank of Cambodia.”
A representative from Standard Chartered in Singapore was scheduled to meet Thursday with National Bank officials. Information on that meeting was not immediately available.
Cambodia’s banking sector has encountered a series of problems in the past few years as the government works toward implementing a new banking law.
In December 2000, 11 banks were closed rather than increase their deposits with the National Bank from $8 million to $13 million as required by the new law. Some of those have banks have been though the liquidation process, and many depositors lost at least some of their money. There were depositor protests outside some liquidated banks.
Standard Chartered, which is a foreign branch and not a locally incorporated bank, was easily able to reach its capital requirement last year, banking analysts said.