Thursday, 06 May 2021

Canadia Bank achieves solid results in profitability and liquidity indicators

 

26 February 2021, Singapore Canadia Bank topped the ranking of Strongest Banks by Balance Sheet in Cambodia in 2020. Canadia Bank and other banks were recognised at the Strongest Banks by Balance Sheet Briefing and Recognition Virtual Ceremony 2020 presented by The Asian Banker.

This is the most comprehensive annual evaluation that captures the quality and sustainability of the balance sheets of banks in the Asia Pacific (APAC), Middle East, and Africa regions.

The ranking is based on a detailed and transparent scorecard that evaluates commercial banks and financial holding companies (banks) in six areas of balance sheet financial performance, namely the ability to scale, balance sheet growth, risk profile, profitability, asset quality, and liquidity.

 

Canadia Bank tops ranking of strongest banks by balance sheet in Cambodia

The bank achieved strong profitability reflected by the high return on assets (ROA) of 2% and the low cost to income ratio of 26.4%. The capital and liquidity buffers of the bank remained sufficient. These, along with the relatively sound asset quality, enabled the bank to demonstrate a better balance sheet performance than its peers in Cambodia.

Raymond Sia, CEO at Canadia Bank, in his acceptance speech said, “This is the second consecutive year that Canadia Bank has actually been recognised as the strongest bank in Cambodia. From this recognition perspective, I would like to say thank you to all my colleagues — 3,300 of them across 62 branches in Cambodia — along with the wisdom and guidance of our chairman, and our board”.

The following were especially considered in the evaluation of the banks’ balance sheet strength and resilience: how accelerated digitalisation are enhancing bank balance sheet strength, the impact of debt moratoria, rescheduling and financial aid measures introduced by regulators on bank asset quality, how banks are growing alternative sources of income amid the record low interest rate, and the strategic economic relief and regulatory support in response to the crisis and effect on the pace and scale of recovery.

 

The bank operates more efficiently and maintains stronger liquidity buffers than its peers

Three banks from Cambodia entered the ranking of Strongest Banks by Balance Sheet in APAC in 2020. The weighted average strength score of these three banks, Canadia Bank, ACLEDA Bank and Advanced Bank of Asia (ABA Bank) is 3.32 out of 5, higher than 3.27 recorded by the 500 largest banks in APAC. With the strength score of 3.55, Canadia Bank, the strongest bank in Cambodia, took the 30th spot out of 500 in the Strongest Bank by Balance Sheet ranking in APAC. ACLEDA Bank and ABA Bank placed 90th and 102nd, respectively.

All three banks enjoyed high ROA but Canadia Bank outperformed the two banks in cost to income ratio. The bank registered a cost to income ratio of 26.4% compared with 55.9% for ACLEDA Bank and 40.3% for ABA Bank. The bank maintained a stronger liquidity position. Its liquid assets to total deposits and borrowings ratio reached 42%, while ACLEDA Bank and ABA Bank recorded lower ratio at 31% and 39%, respectively. Meanwhile, the loan to deposit ratio of Canadia Bank stood at 79%, lower than ACLEDA Bank’s 94.2% and ABA Bank’s 81.2%. Although ACLEDA Bank and ABA Bank had lower gross non-performing loan (NPL) ratio, Canadia Bank maintained higher loan loss reserves (LLR) to gross non-performing loan ratio.

 

The bank continues to cross-sell right products and services and upgrade technology

Sia said, “The mantra is to continue to ensure that we push cross-selling the right products and services to our customers so we can give wholesome banking experience in Cambodia. We saw the pandemic has caused a very drastic shift in terms of digitisation and adoption of new technologies. In Canadia Bank, this helped us accelerate our technology journey. In the next two to three years, we will mobilise more machines and technology. We will roll out more ATMs and cash recycling machines to assist our customers to have less contact but not necessarily less engagement. That is what we are driving internally here in the bank. We want to have less contact but we also want to increase our engagement with our customers”.

 

For the evaluation criteria and full ranking list of Strongest Banks click here

 

 

About the programme

The Asian Banker Strongest Banks by Balance Sheet is an annual assessment of the financial and business performance of the banking industry in the Asia Pacific, Middle East, and Africa regions. The assessment ranks the top performing banks in each country by strength, an evaluation that is based on a belief that a strong bank demonstrates long-term profitability from its core businesses.

The scope and coverage for The Asian Banker Strongest Banks by Balance Sheet come from both the mature markets and the most promising emerging markets in the regions. The focus of the assessment is on commercial banks and financial holding companies with a significant proportion of activity in commercial banking. The assessment does not include central banks, policy banks or finance companies.

The winners are determined using a scorecard approach based on six crucial performance indicators rated on a scale of 0-5: scale, balance sheet growth, risk profile, profitability, asset quality, and liquidity.

 

About The Asian Banker

The Asian Banker is the region’s most authoritative provider of strategic business intelligence to the financial services community. The Singapore-based company has offices in Singapore, Malaysia, Manila, Hong Kong, Beijing, and Dubai, as well as representatives in London, New York, and San Francisco. It has a business model that revolves around three core business lines: publications, research services and forums. The company’s website is www.theasianbanker.com

 

For further information, please contact:

Ms. Sue Kim

Marketing Manager

skim@theasianbanker.com

www.theasianbanker.com

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