More than any other business, numbers speak louder on behalf of success in the banking industry and the growing numbers in terms of expanding assets and net income during one of the most challenging times in the history of banking make Chief Bank a unique subject of the case study.
Starting as a specialised bank in 2013 before graduating into a fully-fledged commercial bank in 2018, the ten-year journey of Chief Bank in Cambodia has been outstanding and remarkable. The bank remains stronger and profitable in the midst of credit challenges and the cost of funding. A pioneer in digital transformation, the bank’s total deposits have surpassed $130 million and total assets stand at $220 million.
The Cambodian banking subsidiary of well-known Hong Kong-based financial establishment Chief Group continues to unlock the power of its unique physical footprint by digitally delivering the clients’ best-in-class emerging and developed market capabilities, insights and solutions. In an exclusive interview with Khmer Times, Chief Bank Chief Executive Officer Soeung Morarith said trust of its customers, professional ethics and digitalisation will remain the key pillars of Chief Bank in its successful forward march. Excerpts:
What have been the major achievements of Chief Bank during the post-pandemic recovery period?
Dr Soeung Morarith: We remain stronger and more profitable while preserving a strong liquidity coverage ratio and capital positions. In 2022, Chief Bank continued to make good strategic progress and delivered an improving financial performance. The external environment we faced was mixed, the war in Ukraine created significant uncertainty in the markets along with the US tightening its monetary policy. However, the global economy remained resilient with the recent relaxation of COVID-19 restrictions in China providing more grounds for optimism in 2023.
Building a good foundation for our quality loan business was our main objective; therefore we have been working well to widen Chief Bank’s deposit bases. As of December 2022, the amount of deposits was over $136 million, which is 17.8 percent higher than that of December 2021. The total assets of the bank reached $220 million with net income recording a 50 percent rise compared to 2021 figures.
The bank’s Non-Performing Assets (NPA) stand at 0.4 percent, which we consider a remarkable achievement. Our strategic transformation continues to progress well. Our strength derives from strategic actions we have taken over the years to secure our solid foundations. The great trust of our customers, as well as the highest levels of professional ethics, integrity, prudence and transparency, remain our core guiding principles.
Could you share with our readers the milestones Chief Bank has achieved in terms of its digitalisation drive?
Chief Bank has been a pioneer in the Kingdom’s banking industry when it comes to digitalisation drive. Our online transactions are seeing unprecedented growth day-by-day and we actively promote Chief Easy App and Bakong KHQR code. Using Chief Lending App, microloans can be applied digitally from across Cambodia and our credit systems are linked to the Credit Bureau, which facilitates background checks and other compliance measures in no time.
Embracing the latest financial technologies has been our top priority and we have an elite Information Technology team as well as tie-ups with leading global tech companies from the UK, Hong Kong and India to frequently upgrade our tech infrastructure.
We now have a range of proven digital capabilities and our re-modelled risk framework has been thoroughly stress-tested, which means we can substantially and economically scale up our mass market retail presence. We will do this with enhanced data analytics and a superior end-to-end digital experience. We are driving innovation to improve our clients’ experience, increase our operational efficiency and tap new sources of income.
How has been Chief Bank supporting the businessmen as well as budding entrepreneurs of the country?
We acknowledge the fact that both businessmen and budding entrepreneurs are vital to the nation’s economy and they contribute towards nation-building by creating employment opportunities. We offer loans and financial support not only to the corporate sector but also to Small and Medium Enterprises (SMEs) and micro-enterprises. We support every genuine business venture and there is no preferential treatment to any sector.
We have an in-house market research team, headed by a Chief Economist, which advises us on the performances of various sectors and our credit policy towards businesses in these sectors is determined by the research findings and credentials.
As a captain of the team, what are the key strategies you have been devising to overcome tough competition in the banking sector?
It is very much true that we are facing severe competition within the banking industry. However, since numbers speak of success I can reaffirm that we have always remained on the winning side. Our winning strategies have been based on three core pillars – digitalisation drive, cost and benefit analysis and right partnerships. Embracing the latest financial technologies has always offered us an edge over our competitors. Our banking applications are highly popular and user-friendly.
The second important area is cost and benefit analysis. We engage in this important process before taking a single step. To illustrate as an example, there are hundreds of fintech solutions in the market and we have partnerships with renowned IT companies across the world. But what we should understand is that we must only subscribe to those fintech solutions that fit into our banking ecosystem. We need to review whether a particular fintech solution will complement our banking product or not. If yes, we must go for it. Or else we shouldn’t subscribe to it. The cost and benefit analysis is vital for success in the banking industry. As a CEO, I am bound to deliver profits to shareholders. Steps have to be taken very carefully. We have to sustain profit growth for the future of business.
And the third factor is the right partnership. We have the best partnership deals with other banks in the country. We have only branches in Phnom Penh, but have customers across the country and this is only possible through the right partnerships. My customer in Siem Reap need not come to Phnom Penh branch to pay the loan installments. We have a partner there and the customer gets services there. They can withdraw money free of charge.
Our success in competition could also be attributed to the best teamwork, right policies in action, good corporate governance, support from the regulator and the government of Cambodia.
How important are the Corporate Social Responsibility (CSR) initiatives to Chief Bank?
CSR initiatives have been our top priority since Cambodian society is of utmost importance to us. Our CSR efforts mainly cater to youths and students. A portion of our profits is earmarked for the social welfare of our country Cambodia. We have to always give back to society, which has been supporting us for the past decade.
Looking forward, what are the future plans for Chief Bank in Cambodia?
As of now, we have four fully functional branches at strategic locations in Phnom Penh. Apart from the head office, we have Chbar Ampov Branch, Phsar Olympic Branch and Preah Norodom Branch. We are all set to open our fifth Aeon Mean Chey Branch at the most popular Aeon Mall 3.
In the near future, our major emphasis and focus will be on expanding the horizons of our corporate branding while fully adhering to compliance norms. We will also be relocating to our new headquarters at the Chief Tower. After 2025, we will be opening branches in the provinces, but as of now, we are focusing on starting operations at strategic locations within Phnom Penh.
As a successful banker, what is your message to the youth of this country who wants to make big in the banking sector?
Success is a path of frequent exploration and it is always an ongoing process with no endpoints. I take classes at universities for undergraduate, postgraduate and PhD students during weekends and whenever I get time. As a mentor, I can say that nothing can replace the quest for knowledge, merit and character. For a successful banker, every day is a unique experience and there is no end to learning. A consistent academic track record is very important for being successful as a banker and of course, character is something that cannot be compromised here as the industry rotates around trust.
The Cambodian youths are really promising and active nation-builders. During one of my recent visits to the US to meet International Finance Corporation officials, I really felt proud upon seeing a Cambodian young woman working with New York Stock Exchange in a reputed position. Cambodian youths are proving that they are capable of professionally shining at global levels and I am pretty sure that they will take the nation’s reputation to new heights.
