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Nation's biggest commercial bank starts initial public offering process

January 13, 2020  |  Source: Khmer Times

Hong Sok Hour, chief executive officer of the Cambodia Securities Exchange, second from left, In Channy, ACLEDA Bank president and group managing director (Middle) and Mr. Han Kyung Tae, aanaging director of Yuanta Securities (Cambodia) Plc.

ACLEDA Bank Plc., the biggest commercial bank in Cambodia, held the first workshop its plans for an initial public offering (IPO) in Cambodia.

In Channy, ACLEDA Bank president and group managing director, said the workshop is to inform the public and potential investors to understand the process of the bank's move.

An IPO enables organisations and people to buy shares in a company on a stock market where the offering is listed and reap dividends if it makes profits or suffer losses if the company declines. The company benefits financially by selling stock and can therefore expand and invest in new technology.

"We have to promote to the public and investors awareness of this process and for those who want to invest with ACLEDA in the stock market," In said. "The growth of ACLEDA Bank stems from its partners, customers and the country's economy. Thus, we are preparing to list its shares on the Cambodia Securities Exchange [CSX]," he added. In other words, the bank feels it is doing so well and is optimistic about the future that it fells it can raise money to grow.

On Nov 26, 2019, ACLEDA Bank Plc received an official letter from the National Bank of Cambodia (NBC), allowing it to proceed with its plans for an IPO in the Kingdom.

It will be the first commercial bank in the Kingdom of Cambodia to list its shares on the CSX. The IPO will mark a new chapter of ACLEDA Bank's success story.

In said: "We just received an official letter from the NBC to proceed to the next stage of the IPO process with the Securities and Exchange Commission of Cambodia (SECC)".

"On this occasion, we would like to inform our customers and the public that ACLEDA Bank Plc.'s shares will be available for investment after getting further approvals from the CSX and the SECC. We will make a public announcements on the date of 'book building' and subscription soon. This will be a unique opportunity for the public to become shareholders of ACLEDA Bank Plc."

This process involves listing those showing genuine signs of interest in buying shares and how many they may be allocated.

"Our goal is to collect the funds to expand the digital infrastructure of the bank. We have to expand, develop and update constantly the bank's digital infrastructure to serve customers locally, regionally and internationally," In said.

"We plan four workshops," he added. "We have received the approval from the National Bank of Cambodia to issue the IPO and approval in principle from the Cambodia Securities Exchange, but we have to wait for the approval from the Securities and Exchange Commission of Cambodia (SECC) for final approval," In added.

Hong Sok Hour, chief executive officer of the CSX, said it is a new milestone for the CSX for a leading local commercial bank to decide to list as an equity firm with it. Previously, few banks listed on the CSX and they focused on the bond market, which is less favourable with the public.

"Before, they kept the profit and share among their existing shareholders. Now, they want to share profits with the public so it is a good sign among for business and they should start thinking about this," he added. "I hope that there will be more investors to join ACLEDA Bank Plc."

Hong added that the procedure for launching an IPO incolves many stages. For a commercial bank, after getting approval from the National Bank of Cambodia, they start working with the CSX and SECC. Through our experiences after getting approval in principle from CSX, some companies will need at least three to four months or six months or beyond. It depends on their readiness and preparation to list.

"For ACLEDA Bank, I hope they will spend less time because they have already prepared so I hope they could be allowed to list by the SECC soon, no later than the end of April. It could be by the end of March or early April," Hong adds.

Han Kyung Tae, managing director of Yuanta Securities (Cambodia) Plc, said: "We are very excited to be part of such a monumental project as the sole financial adviser."

He said when this IPO takes place ACLEDA Bank is going to be the first and only bank in Cambodia owned by the Cambodian people, so you [investors] will be the owners of ACLEDA Bank.

"I believe Acleda bank to be one of the most valuable assets in Cambodia and I believe ACLEDA is going to be one of the safest investments here. We all know that Acleda has been leading the economic growth of this country and will continue to be a leader in the future," he added.

Over the past 27 years, Acleda has transformed from being a nongovernmental organisation (NGO) to become the No 1 bank in Cambodia. Throughout different phases of its development, it has continued to be the leading financial institution in the Cambodian banking sector: from a non-profit NGO to a sustainable microfinance institution, to a specialised bank and now to a commercial bank as of today.

As of Dec 30, 2019, Acleda, in terms of gross loans ($3.7 billion), and total equity ($900million), and the second largest bank in Cambodia in terms of total assets ($6.09bn) and total deposits ($4.24bn).