Technology develops within banking sector

Photo by: Pha Lina

Chipphal Ouk, business development manager for IDG ASEAN, speaks about ITC development during a press conference yesterday. Banks in the Kingdom are increasing their use of technology.

THE domestic banking industry is making increased use of Information and Communication Technology, though usage lags behind many international counterparts, experts said at a conference yesterday.

National Bank of Cambodia officials said the domestic banking and finance sector is becoming increasingly developed, adding ICT will play an important role particularly in developing the stock exchange, payments systems, and credit bureaus.

“These areas require specific technological platforms in order to make functions operational,” said NBC Banking Supervision Department director general Pal Buy Bonnang at the third Banking and Microfinance Cambodia Conference held at Phnom Penh’s Intercontinental Hotel yesterday.

“The role of stakeholders particularly in ICT development is a high priority. Although we are not the experts, the NBC is strongly supportive of the development and contribution from the private sector.”

Domestic banking companies have made increased use of technology in recent years. ACLEDA Bank launched its Unity mobile phone banking service last year. ANZ Royal, meanwhile, has offered internet banking in Cambodia since 2005, according to chief executive officer Stephen Higgins.

Canadia Bank vice president Dieter Billmeier said on conference sidelines that his bank was also interested in launching internet banking.

“We are working on that, and we hope that it will be starting in 2012. Not only an accounting system, but real internet banking,” he said.

The number of internet subscriptions has increased rapidly in Cambodia, according to statistics compiled by the Ministry of Posts and Telecommunications. Cambodia had 173,675 internet subscribers in 2010, an increase on 29,589 a year earlier, statistics last month showed.

Spreading banking services via ICT is also imperative to plugging Cambodia into the global economy, according to Chun Vat, secretary general of the National Information Communications Technology Development Authority.

“To modernise and drive innovation in the banking and financing sector, we need to deploy ICT effectively to harness greater productivity, integration and convenience,” he said.

Increased use of technology meant bankers would better be able to respond to market changes, he said.

International Data Group business development manager Chipphal Ouk said technology usage at Cambodia’s banking sector was increasing at a fast pace, especially through the presence of large international banks.

Cambodia has the potential to quickly reach international standards of ICT usage in its banking system, as much of the required technology was readily available, he said.
(source PhnomPenh post, Friday, 25 February 2011 15:02 May Kunmakara) 

Financial sector still offering low property impetus

IN most economies, increased lending of around 30 to 40 percent among major banks would usually point to a positive knock-on effect in the property sector.

But despite a huge rise in loans in 2010 reported last week by major lenders including ACLEDA Bank and Canadia Bank, little of this extra financing appears to have been channeled into Cambodia’s still struggling property sector which saw land values slide a further 15 percent last year, representatives from the National Valuers Association of Cambodia said last week.

Although the likes of ANZ Royal Bank began to “start pushing” mortgages again around the end of the first quarter last year, following a freeze during the worst of the economic crisis, still the extent of financing available for property remains limited. This means the sector has not benefitted from the strong rebound by the financial sector last year.

Lenders such as ACLEDA still only offer up to 70 percent of financing on a home in Cambodia, less than in more developed economies, and often the maximum term is only up to 10 years.

Canadia Bank, for example, still only advertises mortgages for up to eight years.

Therefore much of the property sector in the Kingdom remains under-reliant on lenders, a factor that has delayed prospects of a recovery for what is the last major segment of the economy to rebound from the slump in 2009.

Given the problems many banks experienced as a direct result of property, which in many cases led to spiraling rates of bad debt, it is unsurprising the financial industry in Cambodia has looked at the sector with trepidation.

The likes of Canadia Bank quickly found themselves overexposed to the slumping property market in the first quarter of 2009 and will be careful not to suffer the same fate again.

This is no bad thing. The Cambodian property market was badly overheated by the end of 2008 so financial sector caution in the future can help prevent a repeat of over speculation.

In the short-term though that means the property sector looks set to continue to miss out on much of the returning optimism witnessed in many other parts of the economy which remain far more attractive to lenders.

With property prices apparently hitting a trough, now is a perfect time to enter the market in Cambodia, particularly with the added recent incentive of legal foreign ownership.

The key test this year will be the extent to which the financial sector is willing to back returning buyers.

Sihanoukville port will float

Japanses-owned SBI Phnom Penh Securities has been selected as underwriter for the Initial Public Offering of Sihanoukville Autonomous Port, though the timing of its listing on Cambodia’s new stock exchange has yet to be revealed.
The port’s listing is “scheduled after the stock exchange becomes operational”, an SBI press release stated today.
The agreement to prepare the state-owned company’s IPO, signed between Ministry of Economy and Finance secretary of state Aun Porn Moniroth and SBI Holdings executive officer and director Kenji Hirai on Monday, emphasised the government’s commitment towards launching the exchange, a government release said.
SBI Phnom Penh Securities was also chosen as an advisor to the ministry, serving in the role along with Tong Yang Securities of Korea, which is the selected underwriter for two other state-owned firms set to list on the exchange – Telecom Cambodia and the Phnom Penh Water Supply Authority.
SBI Phnom Penh is also one of seven underwriters approved for the Cambodian stock exchange which is set to launch in July “at any cost” after being twice-delayed, according to officials.
Today, the director of SBI Phnom Penh Securities, Jeremy Ha, confirmed the deal but declined to discuss the preparations in further detail.
“We have signed an agreement to be financial advisor to the Ministry of Economy and Finance, including preparing an IPO for Sihanoukville port,” he said.
He declined to comment on a possible date for the port’s listing.
“[Cambodia] is a new market, so it’s a bit complicated,” he said.
Sihanoukville Autonomous Port director general Lou Kim Chhun said today the port was preparing for a float, adding it had generated net profits of about US$3 million last year.
“We are readying IPO preparations. We are preparing step by step,” he said.
Figures obtained from the port last month claimed $28.4 million in revenues during 2010, a 13 percent increase on $25.15 million the year previous.
The port has previously received support from Japan.
It has obtained $30 million in soft loans from the Japanese government to help develop a Special Economic Zone on 70 hectares of land near its site.
Work at the site is slated finish at the end of this year.
Over the last 12 months, the listing of Sihanoukville port on the CSX has been uncertain. Last year, the Ministry of Economy and Finance signed an agreement with Korean-owned Tong Yang Securities to handle the other two state-owned enterprises set to list.
But at the time of the announcement, government officials did not name Sihanoukville port as one of the three firms to list, despite it already having been publicly tipped for the exchange.
Instead officials said “another state-owned enterprise which will be appointed later by the Royal Government of Cambodia”, casting doubt on whether the port was to be selected to list on the exchange.
Progress has since been made towards opening the exchange but some issues – such as what currency listings will be allowed in – remain undecided.
Earlier this month, officials at Telecom Cambodia said its shares may not be tradable on the exchange until the end of this year.
(source PPP newspaper, Tuesday, 22 February 2011 19:38 May Kunmakara)

qb boosts network speed

Mobile operator qb claims to have increased its network nationwide to “3.75G” speeds, and is looking to introduce 2G service, according to chief executive officer Alan Sinfield.

“We’re looking to improve our footprint by providing quality data and voice on a national level,” he said yesterday.

The company has increased its network’s speeds to 14.4 megabits per second after a previous run at 7.2 megabits per second, he said.

Sinfield did not reveal the cost of the upgrade, but said it involved “a fair amount of investment.”

The project had been completed last month, and involved upgrading software and improving backhaul connections.

The faster speeds were available on its network – including in the capital as well as cities such as Battambang and Siem Reap and along major roads, he said.

The firm presently holds a 3G licence but no 2G licence, according to a Ministry of Posts and Telecommunications presentation from last month.

Sinfield said qb was looking at ways to provide 2G services as well.

“We’re working on a number of scenarios to provide 2G to our subscribers,” he said yesterday, while not elaborating further.

(source from the phnompenh post newspaper, Friday, 18 February 2011 15:01 Jeremy Mullins)