“Cambodia’s banking system remains strong”
The Covid-19 outbreak has had a devastating effect on the global economy, but Cambodia has managed to maintain good economic stability and the banking system remains strong and solvent to support economic activity, according to a report.
In 2021, banking system assets and deposits grew by 18% and 17.7%, respectively, and loans grew by 23.5%, the National Bank of Cambodia (NBC) said in its latest report.
The bank’s deputy governor and chief executive, Chea Serey, told a “Financial Stability Review 2021” workshop that domestic and global economic activity in 2021 continued to recover despite the emerging new variants of Covid-19 and rising infection rates.
“For Cambodia, the favorable situation in the global economy, combined with the success of the national vaccination campaigns against Covid-19, has stimulated the recovery with a growth rate of 3% in 2021 after a drop to -3.1. % in 2020.
This growth was mainly supported by growth in exports of clothing, agricultural products and non-clothing products, as well as wholesale and retail trade, but the tourism sector contracted as international tourism fell by 84% in 2021.
The banking system remained solid and continued to provide the financing needed to support economic activities. In 2021, banking system assets and deposits grew by 18% and 17.7% respectively, with credit showing growth of 23.5%,” she said.
“Yet, asset quality remained healthy and liquidity levels well above regulatory requirements. At the same time, banks and MFIs continued to comfortably meet the BNC’s capital adequacy criterion. , in line with BNC policy, banks and MFIs have been able to restructure loans worth KHR 20 trillion to 310,7746 accounts since the Covid-19 outbreak,” she pointed out.
The non-banking financial sector also continued its gradual expansion. The Cambodian stock market welcomed for the first time since the platform’s inception in 2015 a company’s listing on the new CSX Growth Council for SMEs. At the same time, the capitalization of the Cambodian bond market reached KHR542.4 billion, with financial institutions accounting for 70% of the share. .
According to the Financial Stability Review 2022, the pandemic is not yet over and the risks of more virulent and transmissible variants remain.
The Russian-Ukrainian conflict and the recurring blockages in China are also weighing on global growth. Inflation, which was already high amid supply-demand imbalances triggered by the pandemic, rose further, he said.