Cambodian Bank wins praise for stability and sound assets quality

Expats heading to Southeast Asia are right to be cautious over banking security, but one Cambodian bank is now being praised by an international credit rating agency.

Developing countries in Southeast Asia are now popular with expats, especially retirees, but their banking systems and the banks themselves don’t usually operate to first world standards as regards stability and security.

One notable exception, according to financial media, is Cambodia’s ABA Bank, recently the recipient of a long-term credit rating of B+ from the Hong Kong-based Dagong Credit Rating Agency. It’s the only bank in Cambodia to achieve this rating, and was helped along by the fact that its major shareholder is the National Bank of Canada.

The Canadian bank offers ongoing operational and financial support, and ABA Bank’s credit rating displays its strong creditworthiness and ability to settle its financial obligations. Its outlook, according to experts’ expectations, is stable, and its stability, capitalisation and liquidity will continue over the next year.

According to CEO Askhat Azhikhanov, the rating gives an assurance of the bank’s stability and the fact that it’s financially stable and well-funded, especially by its Canadian shareholder. Also mentioned were its tight credit processes and strict collateral policies, as well as its excellent annual growth average during the period 2012-2016. The bank is strong on digital services including internet banking, call-centres, a mobile app and self-banking services.

Cambodia’s expat community is expanding rapidly and includes entrepreneurs and talented professionals as well as retirees from the West and relocating expats from Thailand. One of its major attractions for expatriate pensioners with capital to invest is the interest rate on fixed term bank deposits, often as high as 5 per cent or more, dependent on the term.

Until recently, Cambodian banks in general haven’t been seen as models of stability, leading investors to find other targets for their funds. ABA’s new rating and its link to the Bank of Canada is expected to give confidence in the safety of deposits, allowing more expats a decent return for their money.