The half-year net profit of Phnom Penh Commercial Bank(PPCBank), the grandson of JB Financial Group (Chairman Kim Ki-hong), surpassed 10 billion won (USD 8.2 million dollars) for the first time.
The company achieved the highest net profit among Korean financial firms operating in Cambodia, which is emerging as a new battleground for the new southern region, up 28 percent from a year earlier.
JB Financial Group acquired PPCBank as a subsidiary of Jeonbuk Bank in August 2016. Its net profit in the second half of 2016 was 3 billion won, but it surpassed 10 billion won in the first half of this year by recording continuous growth. The figure more than tripled in three years.
First of all, assets have increased significantly. PPCBank's total assets reached 944.8 billion won at the end of the second quarter of this year, up 20.4 percent from 784.5 billion won a year earlier.
Total loans and total credit also increased 32.5 percent and 15 percent, respectively, from 518.3 billion won to 686.7 billion won and 641 billion won to 737.2 billion won, respectively.
Profitability is also rising steadily. Interest income amounted to 19 billion won in the first half of this year, up 32.7 percent from 14.4 billion won during the same period last year. In the one year, the net interest margin (NIM) rose 57 basis points from 4.81 percent to 5.38 percent, far above the average NIM of domestic banks, which is around 2 percent.
JB Financial cited differentiated local marketing policies and digital finance services as the driving forces behind PPCBank's growth. In fact, the total of 19 branches of PPCBank are operated by about 300 locals, and the bank applied a customized counseling system and fostered local asset managers through dedicated staff.
In addition, the bank is upgrading its digital financial services by developing mobile channels in Cambodia and introducing Internet banking for corporate finance with differentiated digital technology.
In June, it also signed a business agreement with the International Finance Corporation (IFC) under the World Bank that supports developing countries to provide $30 million in loans to small and medium-sized Cambodian companies over the next five years. Through this, PPCBank plans to expand funding to small Cambodian companies and build stronger networks there.
"It is very encouraging that we have achieved strong performance of 10 billion won in net profit through expanding customer networks and strengthening digital services despite the difficulties of slowing retail banking growth due to the central bank's interest rate cap and competition in the business sector," a JB Financial Group official said. "By building more diverse channels, we will continue to grow."