Bank Bank Banksss...

Having read a few articles of today on google and VOA, bank bank bank...so how can Cambodian tackle the current crisis? and what are the reactions from those banks and also from the gov't?


Help Promote Growth, Keat Chhon Urges Banks
By Ros Sothea, VOA Khmer Original report from Phnom Penh24 February 2009

Finance Minister Keat Chhon on Thursday urged commercial banks to expand their loans as a counter to the global economic slowdown, which has already lowered projected growth for the country.
“Banks have to play a role in helping the economy,” Keat Chhon told VOA Khmer. “Now the government has arranged for them to take a role by lowering the reserve requirements.”
In September 2008, the National Bank increased reserve requirements for commercial banks, from 8 percent to 16 percent, to help secure deposits. But Keat Chhon said that requirement will now be lowered to 12 percent.

Adjustments to the banking sector come amid a credit crisis in America that has led to a recession and global financial uncertainty.
In Cambodia, the crisis has hurt garment manufacturing, construction and tourism—three pillars of the economy—and the World Bank recently lowered its growth forecast for the country, to 4.9 percent, compared to a rate of 7 percent in 2008.
In Siphan, head of the credit division for Acleda Bank, said the decrease of reserve requirements will allow his bank to have more cash ready for credit and loans, from about $470 million in 2008 to $700 million in 2009.
“We have enough cash to lend,” he said. “We can provide any kind of credit, because we will increase our loans about $300 million.”
Other major banks like ANZ Royal, Cambodian Public and Japan Maruhan are committed to expanding their loans as well.
However, In Siphan said even with banks expanding their loans, only a limited number of investors is currently looking for credit.
Sam Ganty, a financial expert at the Royal University of Law and Economics, said loan expansion by commercial banks would provide more cash flow for investors, which could help Cambodia escape the most serious impact of the financial crisis.
He suggests lowering the reserve rate even more, though, as local banks are not able to find capital from foreign banks.
“The reserve requirement should be as low as 8 percent, so the banks will be able to increase money lending,” he said.

Tal Nay Im, director of the National Bank, said the central bank has no plan to lower reserve requirements further. Commercial banks will have to find resources through foreign lenders to continue their operations, she said.

My reaction: 8% of reserve requirement was what previously levied by NBC, and then v increase, and later on reduce to now 12%. What should the appropriate level of reserve requirement be? Mkt descipline vs gov't intervention is sth hard to justify, yet over-reaction on sth is not good, i believe. I hope i'd get more expertise on discussing such matter.

Advanced Bank of Asia, Cambodia Goes Live on Oracle FLEXCUBE Universal
Banking
Source: Equity BullsPosted On: 2/23/2009 11:49:17 PM

Mumbai, India - February 24, 2009: Oracle Financial Services Software Ltd. today announced that Advanced Bank of Asia (ABA), Cambodia has gone live on Oracle® FLEXCUBE Universal Banking.Oracle FLEXCUBE is providing the bank with a next-generation transaction-processing platform, enabling faster responses to customer needs and improving operational and cost efficiencies.Completed in six months, the project at ABA is the first Oracle FLEXCUBE implementation in Cambodia.ABA has implemented Oracle FLEXCUBE across its corporate and retail banking operations.ABA selected Oracle FLEXCUBE Universal Banking for its ability to seamlessly adapt to local requirements.Oracle FLEXCUBE is providing ABA with a flexible, scalable banking platform, enabling it to offer new products and services, served across multiple channels including ATM and Internet, in the shortest possible timeframe."The Cambodian banking industry is going through a transformation, and we are happy to note that our decision to implement Oracle FLEXCUBE and its successful, on-time implementation has given us a real competitive advantage. With the successful implementation of Oracle FLEXCUBE, we will now be able to bring new products to the market and rapidly scale to address the growing demand for banking services in Cambodia," said Elona Romanova, an official for Advanced Bank of Asia.The stock was trading at Rs.685, up by Rs.12.10 or 1.80%. The stock hit an intraday high of Rs.694.75 and low of Rs.647.The total traded quantity was 45667 compared to 2 week average of 65810.

Not to advertise ABA cuz professionally i should not and i won't do also. hehe..here is just the news, this is just to share the news that Bank in Cambodian is starting to develop itself to be ready for the fragile market. Those strong would survive in the market!!!