Despite a crowded banking sector, Advance Bank of Asia CEO Madi Akmambet says his bank can compete with the largest lenders in Cambodia as it battles to reduce non-performing loans
When Kazakhstan-based investment bank Visor Group bought Advanced Bank of Asia (ABA) in 2007, it inherited some problems in terms of its lending portfolio.
What is your strategy for dealing with your non-performing loans (NPL), among the worst in Cambodia?
I wouldn’t say it’s a big problem. Of course we are facing an issue with NPLs, but every bank in Cambodia faces this issue now as a result of the global downturn and the structure of the domestic economy.
Our NPL ratio was quite high in 2007, around 25 percent, and we decreased it to around 12 to 13 percent last year.
But it’s a question of economies of scale. We had a small loan portfolio, and there were a few – and only a few – loans that could be classified as doubtful or bad loans.
We created allowances, provisioning, in accordance with National Bank of Cambodia (NBC) requirements, but this year we recovered a major part of these NPLs and expect to decrease our NPL ratio to around 7 percent. Click to read more...
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