Cambodia's business environment better than expectation in Q1

PHNOM PENH, Apr. 18, 2011 (Xinhua News Agency) -- Cambodia's banking industry had grown much better than expected in the first quarter and the sector's outlook for 2011 would be rosy, said bankers and officials on Monday.

The kingdom's biggest bank, ACLEDA, reported the record high profit for the first quarter of 11.3 million U.S. dollars, up 182 percent from 4 million U.S. dollars in the same period last year.

"The profit is the highest of all and we expect to see a strong growth of 70 percent this year to about 44 million U.S. dollars," the bank's president, In Channy said Monday.

"Business environment has been quite good so far this year and the borrowers' ability to repay the debts is quite well as the ratio of bad loan has declined to below one percent."

The bank posted 7 percent increase rise in deposits to 974 million U.S. dollars and 8 percent of loan to 800 million U.S. dollars by the end of Q1, driven by trades, agriculture, small and medium enterprises, and housing and real estate financing.

ACLEDA's loans and deposits are expected to increase by about 32 percent and 28 percent year on year, respectively, in 2011 , forecast Channy.

The South Korea's Kookmin Bank-Cambodia saw dramatic rise in lending to agriculture, trades and construction and real estate in Q1.

"The economic situation is much better than our expectation and we expect to see about 20 percent rises of loans and deposits this year," Jang Ki Sung, Chief Executive Officer of Kookmin Bank- Cambodia, said Monday. "

The real estate and construction sectors are booming since the start of the year and we have extended more loans to the sectors.

Thai Saphear, the head of the governor's office of the National Bank of Cambodia, said that lending to agriculture, trades, and housing development has seen rapid increase in Q1.

"Cambodia's economy has seen better sign than expectation in Q1, and the country's gross domestic product (GDP) could expand by 6.8 percent this year," he said.