The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Too many banks... again?

Overbanked Cambodia tries to regain momentum

The rapid growth in the number of banks in Cambodia, as demonstrated by the chart below, has some people who remember the country’s last banking boom worried. Although credit ratings agency Standard & Poor’s says that trust in the banking system has been building, it still remains low thanks to a relicensing programme in 2004 that put an end to the proliferation of zombie banks stifling the economy by forcing them into liquidation. Thirteen such institutions went into "either voluntary or compulsory liquidation", according to a report by the Economic Institute of Cambodia, bringing the total number of banks down from 31 to 18, of which 14 were commercial banks.

The trigger for that liquidation was the National Bank of Cambodia’s raising of the minimum capital requirement to its present level of $13 million. The move was an important step in the efforts to clean up the banking system by stripping it of non-performing institutions but the recent memory of the failure of a large number of under-capitalized small banks alarms observers of the present situation. Once again the number of small banks in Cambodia is rising steadily; the National Bank’s forthcoming further increase in the minimum capital requirement to $35 million appears to be an attempt to force consolidation on the industry.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree