Vietnam's Sacombank opens branch in Cambodia

Saigon Thuong Tin Commercial Joint-Stock Bank, better known as Sacombank, opened its first branch in Phnom Penh earlier this week.  

Sacombank, Vietnam's sixth-largest lender by assets, says it will target Cambodian customers that do cross-border business between Vietnam, Cambodia and Laos. It also hopes to expand its Cambodian network next year by adding additional branches in other provinces. This makes sense as Cambodia is a key trading country for Vietnam. The two-way trade value was $1.7 billion in 2008 and is estimated to reach $2 billion in 2009.

But while it's smart for a Vietnam bank to reach out to neighbouring countries, as the nation's domestic growth opportunities have stalled this year with the global recession, some bankers are expressing concerns that Cambodia is quickly becoming overbanked. Sacombank becomes the third foreign bank to launch in Cambodia since the beginning of May. South Korea's Kookmin Bank and State Bank of India both opened their first Cambodian branches earlier this spring.

"There are already too many banks for a market with a population of about 14 million people," said one foreign banker. "But there is an opportunity for banks that can come in and offer international-level services in trade finance."

At the opening ceremony, Sacombank chairman Dang Van Thanh, said: "We are confident of the Cambodian economy. The Phnom Penh branch has modern banking facilities and packaged financial solutions to add value for customers. The financial services shall boost the growth of the Cambodian banking and finance sector." 

Established in 1991, Sacombank now has equity capital of $396 million and a network of 260 transaction points across 63 provinces of Vietnam. It also has one branch in Laos, one representative office in China, and now a branch in Cambodia. To augment its global reach, Sacombank has 10,802 agents connected to 291 banks in 80 nations.