Citing the slowing worldwide economy, Standard Chartered officials will officially close down the United Kingdom-based bank’s Phnom Penh services today, just three years after opening its doors as a full-service bank.
Although normal cashier services end today, depositors will have until April 30 to transfer funds to another bank or withdraw their money from the bank’s Norodom Boulevard office, a Standard Bank official said Friday.
The bank—one of the few foreign branches here—announced last month it would be withdrawing from Cambodia. Officials noted it was not the banking climate in Cambodia, which has seen a series of turmoils since a banking law passed in 1999.
They said the cause was the global slowdown and Standard Chartered’s restructuring of its Southeast Asian operations.
The decision was made in London as a cost-cutting measure, a high-ranking National Bank of Cambodia official said Friday. The Standard Chartered official pointed out that Bank of America, a large multinational bank based in the US state of California, also recently closed its operations in Vietnam.
There are more than 200 accounts still active at Standard Chartered, the bank official said. A National Bank official said Standard Chartered has enough money available to pay back every dollar it owes its customers.
Starting in May, Standard Chartered will keep a representative office at the MiCasa Hotel. Depositors who do not close their account before April 30 will be able to withdraw or transfer their funds at the representative office.
In April 1999, Standard Chartered opened its doors as a full-service branch to provide corporate and institutional banking services for multinationals operating in Cambodia. Bank officials said they hoped that as Cambodia gained political stability, international investors would see Cambodia as an emerging market.
Standard Chartered’s banking license has been withdrawn, but the bank could acquire its license again if the bank chose to re-open their business in the future, said the National Bank official.
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 new banks have been through 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.