Chairman's Report

Mr. Chhay Soeun, Chairman of the Board of Directors

On behalf of ACLEDA Bank and the Board of Directors, I am pleased to present the 2023 Annual Report to all stakeholders.

The global economy exhibited unexpected resilience in 2023, fueled by greater-than-anticipated strength in the United States, prominent emerging market and developing economies, and China's fiscal support. However, sustained growth remained subdued throughout the year. Headline inflation reached its peak due to factors like the Ukraine war and ongoing pandemic disruptions but receded towards the year's end, partly influenced by tighter monetary policies by central banks. The global economy is gradually recovering from challenges posed by the pandemic, the Russia-Ukraine War, persistent inflation, geopolitical tensions, and central banks' worldwide tightening policies. According to the latest IMF report, the estimated global economic growth for 2023 was 3.1%, down from 3.5% in 2022 and below the historical average of 3.8% from 2000 to 2019. Concurrently, headline inflation dropped to 6.8% in 2023 from 8.7% in 2022. The U.S. economy outperformed expectations, expanding by 2.5% in 2023, up from 1.9%. The Eurozone grew at a more subdued 0.5% in 2023, compared to 2.4% in 2022. Conversely, the Chinese economy expanded by 5.2%, facing lingering risks from the property market slump and global economic slowdown. The Japanese economy was estimated to rise from 1% in 2022 to 1.9% in 2023, while ASEAN economies experienced slower growth at 4.4% in 2023 amid global economic challenges.

In Cambodia, the economy sustained momentum amidst global challenges, experiencing estimated growth of 5.5% in 2023, up from 5.2% in 2022 according to the National bank of Cambodia. This growth is driven by a rebound in domestic consumption, enhanced employment, easing inflation, a robust rebound in the service sector supported by tourism, increased new investments, and substantial growth in non-garment manufacturing exports. However, the real estate and construction sectors continued to experience sluggishness, and the agriculture sector faced slower growth.

In 2023, the banking system continued to dominate the financial sector, actively supporting key economic sectors despite the sluggish credit growth. Deposit strongly increased by 13.1% to USD47.9B while credit growth slowed to 4.8% to USD57.6B, marking the lowest growth rate in the last two decades, caused by the slow recovery of some sectors. In response to this scenario, some prudential measures were relaxed to help banking and financial institutions support major sectors requiring financing for sustenance and expansion of investment.

During 2023, ACLEDA BANK had provided customers with a wide range of payment options to local and international that were convenient, fast, secure, and rich. The BANK has been appointed as a sponsoring bank by the National bank of Cambodia (NBC) for the cross-border QR payment between Cambodia and the neighbour countries—Thailand, Vietnam, and Laos—as well as being in the process of preparing for the next step for ASEAN member countries and other ASIA countries such as India, China, Japan, Korea, and so on. This aims to promote the usage of local currencies, financial inclusion, to facilitate cross-border trade activities and to boost tourism. The BANK collaborated with Mastercard to launch the ACLEDA Mastercard Lady Card in Cambodia. The availability of the ACLEDA Mastercard Lady Card for women customers providing them with more convenient way to make secure digital payment and partnered with RIA Money Transfer to expand remittance services with many pickup and payout locations to RIA's network in Cambodia. Further, the BANK has cooperated with the Global Loyalty Network "GLN International Inc.", a global network of digital wallets for cross-border payments. This will enable the digital wallet users in GLN’s network from the Republic of Korea and all around the world to pay for goods and services in Cambodia.

In addition, the BANK had continued to improve many self-service functions on ACLEDA Mobile, QR code, ATMs, and POSs in line with the customers’ needs and the evolution of digital technology. Meanwhile, the BANK expanded its 177 self-service banking (61 locations in Phnom Penh and 116 locations in provinces) adding to its existing 264 branches. The BANK equipped 1,393 ATMs, 4,728 POS machines, and QR codes based on customers’ requests for transactions of transfers and settlements in markets, shops, hotels, educational institutions, hospitals, travel agencies, gas stations, and other businesses across the country. By the end of December 2023, the BANK has more than 0.33 million business partners and 3.3 million ACLEDA Mobile subscribers.

As of 31 December 2023, total deposits increased by USD 838.82 millions while total loan outstanding grew by USD 235.66 millions, if compared to the year ended 2022. The annual performance 2023 compared to the year 2022, the Group achieved a profit attributable to the shareholders of USD 148.05 millions, an decrease of 18.53% equivalent to USD 33.68 million.

Finally, I would like to express my sincerest gratitude to all shareholders, customers, employees, the public at large, and especially relevant authorities who always support the contribute to the good performance of the BANK, especially for the year 2023.

Mr. Chhay Soeun
Chairman of the Board of Directors
March 21, 2024