The Cambodia Post Bank Plc. “CP Bank” has been established in September 2013 as a full licensed commercial bank, with a strategic partnership between
Canadia Investment Holding Plc., Cambodia’s Ministry of Post and Telecommunications and Fullerton Financial Holdings Pte. Ltd.
Vision: To be the best mass market bank that enriches lives and fulfills the growing aspirations of the people of Cambodia and creates sustainable value for shareholders, employees and society. Mission: To design innovative financial solutions and deliver best in class services to our customers. Values: “RICE” Reliability, Innovation, Care, Entrepreneurship
The Board of Directors of Cambodia Post Bank realized that corporate governance is very crucial health of the Bank and produce economic benefits for the Bank. Corporate governance enhances the reputations and makes it attractive to customers, investors, suppliers and the community. The Bank strives to build a sound corporate culture and establish an effective internal audit function. The bank corporate governance system is designed to create a sustainable value and ensure efficient risk management. The role of the board is defined by taking international best practice while also ensuring compliance with local legal and regulatory framework. Responsibilities of the Board members have been clearly presented to them such as progress on establishing progressive risk management system, and in conformity with corporate governance standards, composition of various committees and membership as well as periodicity of meetings are clearly disclosed to the board. Corporate Governance Structure: The current corporate governance structure includes the Board of Directors (BOD) and under BOD we have professional board committees. CP Bank includes following key board committees:
- Audit Committee
- Risk Oversight Committee
- Remuneration and Nomination Committee
1 – Audit Committee
This committee is constituted under safe and sound corporate governance and it is vested with necessary powers as defined in its Charter to achieve its objectives. The powers and terms of reference of the Audit Committee are comprehensive and comply with the requirements as set out by Article 131 of the Law of Commercial Enterprise, as well as Article 8 of the National Bank of Cambodia’s Prakas B7-08-211 on Governance in Bank and Financial Institutions. The Chairperson of this committee is a Non-Executive Independent Director who will answer all queries from shareholders at Annual General Meeting. Member of the Audit Committee, internal auditors, statutory auditors when invited, other invitees will attend the Audit Committee meeting quarterly.
2 – Risk Oversight Committee
This committee includes three members decided by the Board. It is chaired by a person with expertise in finance and banking risk management. The committee undertakes key duties as decided by the Board of Directors and documented in its Terms of Reference, and any such duties delegated to it. The committee is also responsible for monitoring the implementation of risk management policies as defined by the Board. It also plays a key role in giving professional advice to the risk function of the bank with best international practice.
3 – Remuneration and Nomination
This committee is constituted by the Board to meet requirements of Governance to deliver best practice for the bank. The Chairperson of this committee is an Independent Director. The committee is responsible for implementing a very good remuneration policy to be consistent with the long-term objectives and corporate values of the bank. It also recommends some procedures to select and replace board members and independent individuals who will potentially become committee members. The committee will approve the nomination of senior management. CODE OF CONDUCT The bank adopts a code of conduct approved by the Board of Directors which is bidding one employees of the bank. As and when the Code of Conduct is amended /revised, employees will be informed.
Neak Uknha Pung Kheav Se
Mr. Gan Chee Yen
Mr. Ros Phirun
Mr. Giang Sovann
Mr. Neo Poh Kiat
H.E Ork Bora
Dr. Carolyne Pung, Non-executive Director
Mr. Toch Chaochek
Chief Executive Officer
Mr. Toch has more than 20 years’ working experience in Banking and Financial Sector in Cambodia. He served several senior management levels such as Senior Staff and Manager at Credit Division of ACLEDA Bank Plc. before moving to be Head of Credit Department, Head of Operation Department and EVP & Chief Operation Offcer of Hatha Kaksekar Micro Finance in charge of Company Business’s Strategies, Loan Operational Processes, Loan Portfolio Management, Credit Underwriting, Deposit Mobilization, Products Development and also Branch Channels Supervision. Beside the Banking and Finance experience, he also had 2 years in his frst career started with Manufacturing Industry as Marketing Manager. He is currently also a Board of Director of Funan Micro Finance Plc. Since the date of acquisition. he graduated MBA in Finance and Banking in 2006 from University Of Cambodia, BBA in Marketing in 1999 from National University of Management, Bachelor Degree in Public Law in 1999 and also Associated Degree in Professional Law in 1996 from Faculty of Law and Economic Science. Mr. Toch has also attended numerous executive training courses locally and abroad in feld of Banking and Finance which are most related to Leadership, Performance Management, Risk Management…etc.
Mr. Loy Sareth
EVP & Chief Financial Officer
Mr. Malay Kumer Paul
EVP & Chief Risk Officer
Mr. Yi Sakun
EVP & Chief of Human Resources Officer
Mr. Kong Chhaylong
EVP & Chief Operation Officer
Mr. Kong Kosal
Head of Marketing and Product Development
Mr. Vu Tuan Anh
Head of Risk Management
Ms. Kann Samrech
Acting Head of Legal and Compliance
Mr. Yiang Hak
Head of Credit
Mr. Mam Sokun
Acting Head of Internal Audit
Mr. Krouch Chanthol
Head of IT
Mr. Tiv Chanda
Head of E-channel banking
Mr. Ok Sang
Head of Finance Development
Agriculture accounts for 80 percent of GDP and is a vital economic indicator in Cambodia’s agrarian society. Recognizing the lack of access to affordable and reliable financial services within the banking sector in Cambodia, CP Bank is a cooperative effort between Canadia Bank, Fullerton Financial Holdings (FFH) and Cambodia Post Office to make access to financial services to more people in Cambodia a reality. FFH brings a wealth of knowledge and experience with years of success in the SME sector in most Asian countries, including Indonesia and China, and the Cambodia Post Office helps to extend our network to serve all of our customer’s needs. CP Bank is a banking institution that works with partners who have a significant experience in the small loan sector, which allows Cambodia’s people to grow their business and help improve incomes and living standards, as well as to develop and upgrade the country for further advancement. Moreover, CP Bank offers affordable interest rates with fast, friendly and professional service. We are also providing consultative services to our customers to help them find ways to improve and grow their businesses. Overall CP Bank had a very positive year. The loan portfolio increased to USD 20.85 million and the number of borrowers increased to 2,083 clients. In line with the country’s economic growth, we are able to respond to our clients’ need for larger loans. Portfolio growth was driven by the needs of existing and new customers. For the future, we will continue on our road to becoming a well-developed financial institution capable of delivering services such as mass market banking with a wide branch network across the country. To do so, we continue our investment in branch expansions, IT systems and our human resources. We are preparing for an increasingly competitive environment and positioning ourselves as a preferred financial service provider of high quality tailor made products. Neak Oknha Pung Kheav Se Chairman of the Board of Directors
Cambodia Post Bank has built upon the progress we made last year by further strengthening our governance particularly in the areas of risk management, corporate culture, stakeholders relationship and engagement with shareholders. Today I feel privileged to be standing before you as the CEO of this Bank that has surely reached some new heights in the year 2017. When I assumed the role about 5 years ago with a vision to be the best mass market bank that enriches lives and fulfills the growing aspirations of the people of Cambodia and create sustainable value for shareholders, employees and society. At the very outset, Bank has set some objectives then, which consisted of: i) operate in the mass market ii) Design and provide innovative financial solutions and deliver the best in class services to our customers; and iii) Acquire and maintain better quality asset. The significance of those archetypical projections has got enhanced in recent years; and today it has become more important for the Bank and the industry as a whole than ever before. Cambodia Post Bank is continuously growing with the strategic direction from the shareholders amidst of introduction of different new micro prudential regulations during the last year to control the credit growth. Bank could not only able to serve the customers with superior customer service quality but also able to manage the profitability despite introduction of interest Committee of the Board. So as our internal audit and internal control also directly reports to Audit Committee of the Board and completely independent of business. Bank follows the three line of defenses policy where (i) business as the first line (ii) integrated risk management function as the second line and (iii) internal audit as third line defense. Risk management function plays an independent role in checking and validating risk assessments, control activities, risk information, and monitoring activities for the whole bank. In addition to our business, Bank also committed to corporate social responsibility activities and has contributed to social and economic development through education sector which is considered as the backbone of overall development of Cambodia. Bank always believe in financial inclusion and we are continuously enabling people to realize their dream even at the remote area which ultimately help in poverty alleviation. The Bank continues to contribute to social development and grow together with our customers. We are also an equal opportunity employee with 1,419 staff and we have 27:73 ratio of female and male in our work force where we encourage local community people to work with us. Keeping the macro market conditions as a backdrop, I must say, we have generated modest growth in our portfolios along with strong profitability ratios. Our consolidation total asset size stood at US$ 571 million as of 31st December 2017 against US$ 416 I would like to take this opportunity to thank our most valued clients, well-wishers and most honorable shareholders, in whom we take pride. Without your continuous support and inspiration, we would not be standing where we stand today. Let me also acknowledge the contribution of the regulatory bodies National Bank of rate cap for lending early last year. Bank has introduced automated queue management system, revised account opening process to ensure a better customer experience and always at the forefront of technology. Bank has successfully introduced ATM which are already equipped with Central Shared Services to enhance its services further for our customers. Bank also has mobile banking services which enables our customers to use the basic banking needs on 24/7 basis at their own convenience. With introduction of 5 new branches in 2017, Bank to has now 42 branches to reach out to our customers. Moreover, Bank has recently acquired 100% stake share of Funan Microfinance and this has helped us to extend our services to more people through its 50 branches across Cambodia. Bank will be at its 5th Anniversary soon and by this period, the bank is well recognized as sustainable with measured fast growth, profitability and become the third largest banking network among commercial banks in Cambodia. Bank always very keen to maintain the international standard and has adopted best practices for organizational structure along with corporate governance, risk management, internal audit, and regulatory compliance. In 2017, we have achieved the Gold Category Award for Tax Compliance. The Bank has a robust independent integrated risk management function who have direct reporting line to Risk Oversight million as of 31st December 2016. In 2017, our consolidation loan book increased by US$ 121 million (50%) and deposit from customers rose by US$ 113 million (46%). Our consolidation operating income grown 36% over 2016 whereas Profit Before tax stood at US$ 10.7 million registering a growth of US$ 0.8 million (8.4%) over 2016. We managed to bring down our Cost to Income ratio to 47.6% in 2017, compared to Cost of Credit % in 2016. This is an indicator of our effort to manage costs across the organization through efficient monitoring and awareness building. Without effective use of both human capital and technology driven tools, achieving this number would not have been possible. Capital is the base on which we built our sustainable growth platform, risk management framework and also our long term objectives in order to maximize the stakeholders’ wealth. Our paid-up capital as at 31 December 2017 is US$70.79 million and we have proper plan to reach minimum capital requirement of US$ 75 million by March 2018. We are committed to build such a culture where ethical codes and standards will be given the highest value when, on the other hand, breach of such conduct will be dealt with utmost strictness. Additionally, we are constantly striving towards building a tighter security, both around and within our IT infrastructure. Toch Chaochek Chief Executive Officer
CP Bank has established an integrated risk management function reporting directly to the Risk Oversight Committee at board level. The bank also establishes sub-committees such as CCC (Credit Committee) for credit risk and loan portfolio management, ALCO (Assets-Liabilities Management Committee) for interest rate risk and liquidity risk management, and ORMC (Operational Risk Management Committee) for operational risk management. All risk documentations are set up in place with a periodic monitoring basis. As CP Bank is growing at a fast pace, it continues to solidify risk management capabilities and control with enhancements relative to risk procedures, risk policies, risk tools, risk analytics, and risk MIS reports. At the same time CP Bank’s credit underwriting and credit control procedures as well as credit policies are also constantly reviewed and fine-tuned to balance between speed, cost and risk control. Risk awareness is constantly raised through a series of internal trainings. By 2017, delinquency rate of the bank is 1.15% and NPL rate is 0.85% that is an acceptable performance as compared to the banking industry criteria.
With the support of Fullerton Financial Holding Plc. partner, CP Bank has built prudent credit policies and robust MIS for credit products and customer segments and applied advanced risk measurement techniques such as credit stress test, measurement of concentration of risk and risk transition measurement by customer segment, etc. Credit risk mitigation instruments for credit portfolios have also been gradually developed. In addition, the risk assessment procedures used for financial institution counterparties have been implemented. All risk policies and procedures are regularly reviewed and systemized to facilitate risk management for different stages of the credit life cycle. Along with technology advances and constant development of FinTech arena, CP Bank also looks at key systems to support business and enhance operational efficacy. Key systems like Loan Origination System, Collections System, and Credit Scoring System are in the progress and it is expected to go live soon in 2018.
CP Bank has built a robust Operational Risk Framework including an Operational Risk Management policy, a loss data collection system, and KRI (Key Risk Indicator) system to be able to assess, analyze, measure, monitor, and manage operational risks. At a granular level, the Bank has implemented RCSA (Risk Control and Self-Assessment) program exhaustively with activities to help constitute a risk culture and risk-based environment in operational risk control across the bank. There are on-going RCSA workshops delivered to all functions and branches across the bank to enhance Operational Risk Management practice. For next phase, CP Bank will adopt one of three methods including Basic Indicator Approach, Standardized Approach, and Advanced Measurement Approaches under Basel II standards in measuring and calculating capital charges for operational risk. By 2017, CP Bank recognized no actual loss amount related to operational activities except some negligible near-misses.
CP Bank fully monitors its liquidity position with monitoring metrics such as cash flow analysis, maximum cash outflows, liquidity stress tests, liquidity contingency plan that fully interlinked with Business Continuity Plan of the bank. These practices have been supporting the Bank in forecasting and reacting smoothly and effectively in normal and stressed scenarios and it also helps the bank maintain a sound liquidity position. Additionally, in order to approach an international standard, CP Bank will adopt liquidity standards under Basel III in which key metrics such as Liquidity Coverage Ratio for short-term liquidity and Net Stable Funding Ratio for longer term liquidity will be integrated into liquidity risk management framework. By 2017, CP Bank maintained the liquidity risk management fairly well with a full compliance of liquidity regulatory requirements.
The bank adopts a code of conduct approved by the Board of Directors which is bidding on employees of the bank. As and when the Code of Conduct is amended /revised, employees will be informed. All employees of the bank are governed by a strict Code of Ethics which is incorporated into the Collective Labor Agreement and which covers such matters as: personal behavior; relationships with colleagues, customers and regulators; confidentiality; conflicts of interest; acceptance of gifts; money laundering and ‘whistle blowing’. This document is regularly reviewed by the Audit and Compliance Committee to ensure that it remains relevant and up-to-date. CODE OF BANKING PRACTICE In line with efforts to contribute towards a banking system that is robust, inclusive, customer-oriented, and trust-based, this Code of Banking Practice (“Code”) sets out the standards of good banking practice that individual customers, business customers, and guarantors (collectively known as “Customers”), can expect when dealing with Financial Institutions. The Code is intended to apply to Banks, Specialized Banks, and Micro-Finance Institutions (collectively known as “Financial Institutions”), who as signatories agree to be bound by its provisions. This Code aims to: 1. Promote good banking practices by setting standards for us to follow; 2. Increase transparency so that Customers can have a better understanding of what they can reasonably expect of the services provided by Financial Institutions; (c) build a fair and professional relationship between Customers and Financial Institutions, based around principles of equity and equality; 3. Foster confidence in the banking system; 4. Encourage a corporate culture of fair dealing.