Two financial institutions with corporate bonds on the Cambodia Securities Exchange (CSX) reported mixed results for the first quarter of the year – ended March 31 – amid a worldwide economic downturn tied to growing inflation and the protracted Ukraine crisis.
In its May 18 filing to the CSX, Phnom Penh Commercial Bank Plc (PPCBank) reported profit before tax, net profit, and net interest income of 27.078 billion riel ($6.7 million), 21.226 billion riel, and 47.484 billion riel in the January-March quarter, respectively, down 22 per cent, 23 per cent, and 9.3 per cent year-on-year.
“The [decrease in] the profit is mainly from increasing of interest expense on customer deposits,” the report said, noting that revenues were also lower in the three-month period.
The Russo-Ukrainian conflict and ensuing sanctions on Russian entities have had significant adverse effects on post-Covid-19 global economic recovery, while the recent US bank collapses have rocked the market and added pressure on weaker financial institutions already dealing with the unexpected repercussions of rising interest rates and elevated inflation, it noted.
PPCBank chairman Yim Yong-taick anticipates post-Covid 2023 to be a challenge despite his institution’s relatively rapid growth, given that the government recently lowered the year’s growth forecast from 6.6 per cent to 5.6 per cent.
“With this solid growth that we have achieved and continuous increasing numbers of our customers [who] have embarked on using the services, our plan is to keep expanding to broaden our reach to our customers nationally,” Yim said.
“[We hope] to create a success story in Southeast Asia in the financial industry by building [a] flexible IT system and digitalisation base in the short-term, and secure and advance competitiveness through differentiation in the mid-term.
“Moreover, we will help small-business owners and SMEs [small- and medium-sized enterprises] in the vicinity make their way through the difficulties caused by the Covid-19 pandemic while expanding our inclusive finance. And more efforts will be made to support local communities and the marginalised through a variety of social contribution activities,” he added.
Meanwhile, PRASAC Microfinance Institution Plc reported total assets of $5.15 billion at the end of the first quarter, up 13.20 per cent year-on-year.
Deposit balance and shareholders’ equity grew to $2.83 billion and $891 million as of March 31, while the gross loan portfolio reached $4.53 billion.
The microfinance institution (MFI) affirmed that “registered capital was $400 million” during the reporting period.
PRASAC chairman Jun Kwi-sang assured that all key financial performance metrics, such as deposits and loans, total assets, profits, and others pertaining to fintech (financial technology), have once more shown remarkable growth.
“We have learned a lot from the challenges of the past several years that made PRASAC become a strong and stable institution for 27 years of sustainable growth,” he said.
“These results are fuelled by the institution’s successful implementation of its sound business strategy, the offer of tailored financial products and service to target customers.
“It’s been three years since our corporate bonds issuance. We are proud to be the first financial institution to issue the largest corporate bonds in the history of Cambodia’s capital market for the total amount of 127.2 billion riel.
“[We] are also proud to play the crucial role in developing the securities market and promotion of the Khmer riel,” Jun said, referring to the Cambodian currency.