The 2024 Cambodia Banking Conference, held in Phnom Penh from August 22-23, brought together industry leaders, policymakers and international partners to discuss the future of the country’s banking sector in the face of global economic challenges. 

The event, themed "Uniting Finance: Strengthening Cooperation for a Resilient Financial Sector", highlighted the critical role of collaboration and innovation in maintaining the stability and growth of the country’s financial industry.

Em Kamnan, deputy director-general of Banking Supervision at the National Bank of Cambodia (NBC), underscored the importance of resilience in these uncertain times during his opening remarks. 

"As the global economy continues to face numerous obstacles, including geopolitical tensions and economic slowdowns, Cambodia's banking sector must adapt and innovate to remain robust,” he said.  

“The conference serves as a crucial platform for stakeholders to strategise and navigate the evolving financial landscape," he added.

According to Kamnan, the conference's agenda focused on the dynamic shifts in the global economy, particularly the impact of digital transformation and disruptive technologies like artificial intelligence (AI) and fintech. 

He said these advancements are reshaping banking operations, customer experiences and risk management strategies. 

Rath Sophoan, chairman of the Association of Banks in Cambodia (ABC), emphasised the significance of embracing these changes. 

“We must equip ourselves with the knowledge and tools to harness the potential of digital innovation while managing the associated risks,” he explained.

He said the conference was an opportunity to share best practices and explore new ways to strengthen the sector.

Ly Sodeth, senior economist at the World Bank, highlighted the resilience of the country’s banking system in the face of global economic uncertainties. 

“We are at a crossroads for Cambodia and the world, but it is clear that the banking system is still doing well, though not as strong as before," he noted. 

He emphasised the importance of the country’s international reserves and low inflation rates as indicators of economic stability, despite challenges like slower growth in China and changing global trade dynamics. 

"There’s strong confidence in the banking system, as evidenced by a 15% year-over-year growth in private sector deposits," Sodeth added, underscoring the sector’s resilience amidst global challenges.

He said the conference also addressed the need for innovation and diversification in Cambodia’s economy. 

Kruy Narin, deputy director-general of the General Department of Policy at the Ministry of Economy and Finance, discussed the necessity of shifting growth drivers away from real estate and towards more productive sectors. 

"The government is committed to supporting growth through long-term reforms in education, infrastructure and the business environment. It is crucial to tackle these areas now to ensure sustainable growth in the future," she stated. 

Narin acknowledged the challenges faced by the sector, noting that regardless of how uncertain the external environment might be, there was a need to work together to create a balanced regulatory environment that would maintain financial stability while supporting economic growth.

Despite the challenges posed by the global economic environment, she said the country’s banking sector has shown remarkable resilience. 

According to Sophoan, in the first half of 2024, the sector saw an increase in assets by around 14%, with the capital adequacy ratio (CAR) remaining strong at over 22%.

He said the sector's liquidity coverage ratio (LCR) stood at 179%, demonstrating its ability to withstand financial shocks. However, challenges such as a non-performing loan (NPL) rate of 6.8% still require careful management.

Sophoan also highlighted the importance of sustainable finance and financial inclusion as critical agendas for the industry. 

"Sustainable finance is not just a trend; it is a necessity. Our industry must increasingly integrate environmental, social and governance (ESG) considerations into our business models. Additionally, promoting financial inclusion is vital for fostering economic growth and social equity in Cambodia," he added.

The two-day conference featured discussions on regulatory compliance, cybersecurity, crisis preparedness and the role of banks in extending services to underserved populations. 

These sessions provided participants with insights into the challenges and opportunities facing the Cambodian banking sector, as well as practical strategies for enhancing resilience.