Saturday, 12 January 2008

Cambodian banking sector improving but not there yet: S&P

Fri, 11 Jan 2008
Author : DPA

Phnom Penh - Standard & Poor's has awarded its first credit rating to a Cambodian bank but says despite strong growth and a complete overhaul of the banking sector the country remains a risk. The rating agency praised the country's central bank, saying it had "taken steps to restore confidence and implement improvements," but still awarded Cambodia a group 10 Banking Industry Country Risk Assessment in its report, received Friday.

Lack of a track record on the effectiveness of the new legal frameworks, a lack of transparency and a relatively small banking sector at a nascent stage of development all offset the country's rapid economic growths as weaknesses, the report said.

It assigned Acleda Bank Plc, Cambodia's third-largest bank, a B+/B credit rating, making it the first Cambodian bank to achieve a rating. However B+ is still four levels below investment grade.

Cambodia's group 10 rating overall puts it on a par with countries such as Bolivia.

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