Message from CEO
Since the new Sathapana Bank was born and started banking operation on April 1, 2016, all Sathapana bank staff have worked hard to complete the post merger integration in order to establish strong foundation of the new bank to provide customers all over the country with the best full banking services.
In 2017, the bank took several major steps to strengthen the organization -- revised organization structure, management committees, staff remuneration scheme, and policies and procedures, and established code of conduct. The bank also embarked on major investment in developing strategically important products such as mobile and internet banking, international settlement cards and deposit taking ATMs with cash recycling function.
Cambodia's economy continued growth at 6.8% in 2017 (World Bank) following the annual growth of around 7% in the previous six years. The bank's loan increased 32% to USD809 million in 2017, a higher growth than the 11% increase in 2016. Retail loans increased 34% while commercial loans increased 8%. Asset quality remained strong with NPL ratio of 1.33% slightly down from 1.57% of the previous year. The bank's KHR loan balance to the total outstanding loan balance was 6.00% at the end of 2017.
Customer deposit growth in 2017 was slow at 7% to USD587 million as the bank strategically reduced deposit interest rates twice in early 2017 in order to eliminate excess liquidity which was created with rapid 68% increase of deposits at high interest rates in 2016. The bank increased long-term borrowing from international and domestic lenders by 26% to USD215 million. As the result, the bank restored the efficiency of the balance sheet while maintaining adequate liquidity and better maturity gap positions between loans and funding.
With the improved ALM (asset and liability management), the bank's net interest income increased 15% to USD67 million and net fees and commissions income increased 471% to USD5.4 million with increased fee service opportunities since the new Sathapana started operation as a commercial bank. Total operating expense increased 8% with personnel expense increase of 21% and administrative expense decrease of 9%. Consequently, the bank's NPAT in 2017 reached USD18.6 million recovering with 110% increase from NPAT of USD8.8 million in 2016. ROA and ROE improved to 1.79% and 11.92% respectively from 0.91% and 6.28% of the previous year. Capital adequacy ratio was maintained at 18.11% at the end of 2017.
Sathapana Bank is committed to continue supporting the individuals' business and SMEs all over the country and to contribute to inclusive and sustainable development of Cambodia's economy. The bank emphasizes effective use of digital technology and importance of the bank's all channels that directly reach to customers on a daily basis. All Sathapana Bank staff do our best to provide our customers with secure and convenient services and the best customer experiences at all and every channel. We continue pursuing such goals with strong financial base, transparency, compliance and good corporate governance.
I thank all customers for your trust in Sathapana Bank, all our partners for your support and cooperation and all our bank staff for your good and hard work. The bank proceeds further to our goals ahead in 2018.
Norihiko Kato, CEO