In recent years, Cambodia’s banking and finance industry has witnessed significant mergers and acquisitions (M&A), highlighting the sector’s dynamic growth and the strategic moves of regional financial institutions. Notable M&A activities include:

  1. Phillip Bank Plc and Kredit MFI Merger (December 2019): Phillip Bank merged with Kredit Microfinance Institution, creating one of Cambodia’s largest commercial bank branch networks with 89 branches nationwide. This consolidation aimed to leverage Kredit’s deep Cambodian roots and Phillip Bank’s international expertise, especially Singapore, to offer comprehensive financial services and expand outreach across the country.
  2. KB PRASAC Bank Plc. Formation (August 2023): South Korea’s KB Kookmin Bank merged its two Cambodian affiliates—PRASAC Microfinance Institution Plc. and Kookmin Bank Cambodia Plc.—to form KB PRASAC Bank Plc. This merger combined PRASAC’s extensive microfinance experience with Kookmin Bank Cambodia’s advanced financial innovations, resulting in a commercial bank with 192 branches across Cambodia.
  3. Bank SinoPac’s Acquisition of Amret MFI (January 2025): Taiwan’s Bank SinoPac Ltd. acquired an 80% stake in Cambodia’s Amret Microfinance Institution for approximately USD 550 million, with plans to acquire the remaining shares over the next two years. This strategic move aims to expand Bank SinoPac’s presence in Southeast Asia and enhance financial services in Cambodia.

These M&A activities underscore a trend of consolidation and expansion within Cambodia’s banking sector, driven by both local and international financial institutions seeking to enhance their market presence and service offerings.

Insights from Industry Expert

Amidst recent reports that banks and financial institutions (FIs) in Cambodia have seen falling revenues and rising Non-Performing Loans (NPLs) over the past months, Taiwan-based SinoPac Co Ltd’s plans to acquire Amret, one of Cambodia’s four microfinance deposit-taking institutions, has generated some interest and curiosity.

What does this mean given that Cambodia’s banking and financial market has long been perceived as ‘overly crowded’, with more than 60 commercial / restricted banks and FIs operating in the Kingdom of 16+m population, and an economy whose GDP is approximately USD 30 billion in 2023.

The following insights are courtesy of Mr. Ong Teong Hoon, an experienced banker of 47 years in the banking and finance industry, and is currently the Shareholders’ Representative of Phillip Bank Plc, the only Singapore-owned commercial bank in Cambodia. Phillip Bank is also the third largest commercial bank – by the number of branch outlets – in the Kingdom.

  • The primary drivers for M&A in Cambodia’s banking and finance industry are foreign FIs seeking to establish a presence in Cambodia. This is seen as a strategic move to gain entry into a region considered the last frontier for growth.
  • In terms of future trends, an increase in M&A activities involving foreign FIs can be anticipated, while the establishment of new banks is more likely to slow down due to market saturation. This is partly driven by MDIs upgrading to commercial bank status, and existing banks facing rising NPLs.
  • One of the factors that could influence M&A activities in the banking and finance industry is government policy, particularly the new/upcoming policies appear to adopt a more accommodative stance towards cryptocurrency, as it may in turn encourage commercial banks to explore partnerships or acquisitions with Fintech companies in the crypto space.
  • In terms of risk factors, investors should carefully scrutinize asset quality, especially re-financed assets, as re-structured loans can mask delayed NPLs. It is also crucial to evaluate operational processes and staff quality. Overall, current economic conditions make the valuation of financial institutions particularly challenging.
  • For companies considering M&A in the Cambodian banking and finance industry, it is important to note that regulatory authorities appear to favor shareholders of banks and FIs to be financial institutions themselves, which might pose challenges for non-FI acquirers. New entrants must also prepare for a highly competitive market, and prioritize digitization in their operations to remain viable, as conventional banking methods are increasingly being replaced by electronic transactions. Ensuring that staff are digitally proficient is also essential to meet the demands of a modernized financial landscape.