BRED Bank shows Riel potential
As the Cambodian Riel enters the 42nd year since its revival, BRED Bank Cambodia (the Kingdom’s only European-owned bank) looks ahead to the significant role the currency will play in the exciting economic journey ahead.
In February, following a year where the whole world has been distracted by the challenges of the global pandemic, the French banking group, BRED Banque Populaire, posted excellent annual results. Despite the global economic difficulties, BRED Group showed remarkable resilience. Net banking income is up 2.8% at €1.265bn, gross operating profit is up 2.8% at €512.6m and shareholders’ equity stands at over €5bn.
Singled out amongst the many positives mentioned in the glowing report, is the progress made by its international subsidiary, BRED Bank Cambodia.
“We’re excited about the potential for economic growth in the Kingdom,” says BRED Bank Cambodia CEO, Guillaume Perdon who has led the bank since it opened for business in Phnom Penh in 2017, “and we’re working hard with local businesses to meet their needs with fresh capital, tailored services and, of course, the highest international standards.”
While BRED Bank’s lending portfolio is predominantly weighted towards the US Dollar, the bank is more than comfortable to deal in Riel. “While funds for large transactions are generally requested in USD, many of our customers also have a strong requirement to transact business in our local currency,” says Deputy CEO, Sopha Min who sees a positive long-term outlook for KHR. “BRED Bank Cambodia fully supports the National Bank’s ambitions for the currency and we’re working hard to ensure that KHR plays a key role within our business.” In practice, that means things like supporting KHR lending as soon as businesses receive KHR income so that they avoid any currency mismatches.
At the heart of the ‘de-dollarisation’ (or should that be ‘reil-ification’?) of the Cambodian economy is customer confidence. The 41 years of hard work by the Kingdom’s central bank has seen the currency grow in stature from an extremely difficult starting position. In the past 10 years, the Riel has stabilised against the dollar within a relatively tight range while usage rates have grown exponentially as the NBC’s policies have taken root.
“As a nation, it’s very much in our interest to develop a strong currency,” says Sopha Min. “Increased adoption of a strong and stable Riel is the natural direction of travel for the people of Cambodia and we’re fully behind the currency and ready to play our part at BRED Bank Cambodia.”
Evidence of the Bank’s commitment to the local currency is in plentiful supply. BRED has comfortably met the 10% KHR lending target set by the NBC. On the deposit side, the Bank offers premium rates to KHR savers and provides a host of attractive savings products covering everything from instant access to fixed term deposit accounts. In the Cambodian property market, BRED Bank is making great strides, offering some of the best interest rates in the market and the flexibility to borrow either in USD or KHR.
“We’re growing fast,” says Guillaume Perdon, “and we have a very optimistic outlook not just for our own business but for the future of Cambodia and its currency.”