BRED Bank Cambodia, a subsidiary of BRED Banque Populaire, expressed satisfaction with its growth in Cambodia since the launch of its headquarter in March last year and recent opening of new branches.

The Post’s Hor Kimsay sat down with its CEO Guillaume Perdon to discuss the bank’s operations and its expansion strategy.

What can you say about your business after more than one year in Cambodia?

The business’s growth after one and a half years is very good for us. I would say maybe a little bit better than what we initially expected. We are very satisfied with our investment in Cambodia.

We started from scratch as we did not buy any bank. Now we have a couple of thousand customers.

Up to now, we have disbursed around $100 million in loans and the same amount in deposits. Within the next four to five years, our goal is to be in the top five to 10 banks in Cambodia.

We just opened two branches in addition to our headquarters – one in Tuol Kork and another in Siem Reap. We plan to extend our networks or branches to about 15 to 20 within two years. So, by the end of the year, we will open some more branches like in Battambang province, Mao Tse Toung [Boulevard, in Phnom Penh].

Next year and the year after, we will keep opening branches in Phnom Penh and [the] provinces. The market is still growing well in Cambodia. We are optimistic about the future development of the bank.

Who are your major customers so far?

We are working with all segments includes retail, SMEs, and larger international corporations. Among the total business loan portfolio, I would say that more than 80 per cent of the loans that we provided [support] local Khmer-owned companies.

For the retail side, I would say that at least 60 per cent is Khmer people – we are not targeting only French companies or French people. We work with everybody.

Should your comment on making good business progress in Cambodia encourage other French companies to explore opportunities in the Kingdom?

The implementation of French Banks in Cambodia will be very attractive for potential French and European potential investors. As you know, we are not just the only French bank but also the only European bank in Cambodia. I think our success will attract more investors from France or Europe.

What are your main challenges in operating a bank in Cambodia?

The main challenge for us, as we start from scratch, is to find people – to train people. There is also competition in the banking sector. On the business side, there are many competitors and it is a major challenge for us.

Do you think the Cambodian central bank regulation requiring lending institutions to have at least 10 per cent of their loans in Khmer riel by the end of next year is a challenge?

It is a bit of a challenge for us. We have started providing loans in Khmer riel. It will be hard to be compliant by the end of this year, but we hope we will fully comply by next year.

I will not disclose the exact number, but I can tell you we will be about halfway by the end of this year, and [by] the end of next year, we should reach 10 per cent which is required by the central bank.

We are focusing on companies and businesses that are selling services and products in Khmer riel.

How about microfinance institutions (MFIs) that might need loans in local currency for their customers?

It is another possibility and a part of the discussions with regulators. The regulators already considered [having banks] make some loans to [MFIs] in Khmer riel so that they can lend money to their final customers in Khmer riel. It is another alternative.

We have observed that many MFIs have sold a majority or entire stakes to banks in Asia. What do you think about this new trend and are you interested in buying any MFI in Cambodia?

The micro-finance business is well developed in Cambodia and attracts foreign investors. I think it is very good for the country.

Some MFIs have been growing very fast and trying to turn to banks. When compared to other countries in the region, the MFI sector in Cambodia would probably be one of the good and strong points for the country. It supports the development of the whole economy, especially micro business in remote areas.

I don’t think it is our strategy to invest in MFIs in Cambodia. Our group is not investing in MFIs in Cambodia or any other country. Our goal is to start from nothing and grow step by step with our own internal growth.

This interview has been edited for length and clarity.