Banks report higher lending in Q1

Photo by: Heng Chivoan

A bank clerk counts money at the end of February in Canadia Bank's headquarters in Phnom Penh. The company has reported lending is up 5 percent in the first quarter, compared with Q4 last year.

via CAAI News Media

Monday, 05 April 2010 15:01 Nguon Sovan

ACLEDA’s lending up 8.8 percent compared with Q4 as commercial banks’ NPL rates recovered.

BANKS saw increased lending in the first quarter this year, with bad loan rates declining and demand in key sectors rising, officials said.

Lending at Canadia Bank rose 5 percent, to US$405 million, in the first quarter, up from $385 million at the end of 2009.

Business loans have picked up since the last quarter of last year, after a steady decline in the first three quarters of 2009, Canadia Vice President Dieter Billmeier told the Post Thursday.

“The lending growth is not on a high curve, but [it is] consistent,” he said.

Loan demand picked up in agriculture, the service sector and tourism, while general buying and selling of homes increased, he said.

Meanwhile, the bank’s non-performing loan (NPL) rate improved, dropping 8 points, to 4 percent, from 2009’s last quarter.

“For this year, we consider the outlook for the whole of 2010 optimistic and see our loan portfolio growing from $430 [million] to $450 million of bankable loans,” Billmeier said.

“We are also optimistic that we can hold the non performing loan ratio for the whole of 2010 at 4 percent.”

Billmeier said deposits grew 18 percent in the first quarter, to around $655 million.

ACLEDA Bank saw better growth in lending than it did in deposits for the first quarter, posting an increase in loans of 8.8 percent, or $585.5 million, and an increase of deposits of 7 percent, to $736 million.

“We expected over 30 percent growth [in loans] for this year,” ACLEDA President In Channy said Thursday.

The bank is trying to manage deposit growth and high liquidity, and has already slashed 1.25 percent from its one-year deposit rate, he said. “What we want is to release more lending, to balance between loans and deposits.”

In order to improve its loan ratio, ACLEDA cut interest rates on three occasions, for a total 5 percent, on loans above $300,000, down to a rate of 10 percent for year-long loans and 12 percent for longer-term lending.

ACLEDA’s NPL rate hit 0.7 percent in the first quarter, down from 1.05 percent at the end of 2009. Net profit for the quarter was $4 million.

“It’s a lot of profit in the [first quarter],” In Channy said. “For the whole of last year, we earned a net profit of only $9.9 million. So based on the first-quarter results, we expect to see about 15 percent up in net profit this year over last year.”

New banks also saw better lending this quarter.

Angkor Capital Bank’s lending grew 15 percent, to $15 million, while deposits grew 20 percent, to $22 million.

“We are still new here, so we are constantly growing in both lending and deposits,” Angkor Capital General Manger Alex Ng said Sunday.

“But for lending, we see that the loan demand is still too weak, and we’re still quite careful about giving out loans.”

Ramesh Chandra Baliarsingh, chief executive of Bank of India, which launched in May 2009, said his bank had a limited period of operation last year, making quarterly comparisons less important.