Prince Bank Plc., headquartered in Phnom Penh, Cambodia, began operating as a private microfinance institution eight years ago. In 2018, after the central bank granted its commercial banking license, it embarked on an ambitious mission to become the Kingdom’s banking-industry leader, providing a comprehensive selection of targeted financial solutions conveniently and efficiently to an expanding number of retail and commercial customers nationwide. A relatively new bank, Prince Bank has mastered technological innovation and is committed to providing a well-rounded suite of leading-edge personal and business products and services—including current and savings accounts; term deposits; home, personal and business loans; overdraft facilities; and bancassurance—through multiple channels. Although the bank stands out with its premier digital and mobile offerings, including three popular mobile apps, it recognises customers’ needs for human contact. With 35 branches and 83 automated teller machines situated in several provinces (and more planned), Prince Bank is committed to reaching as many customers as possible throughout the Kingdom of Cambodia. The bank is particularly interested in supporting small and medium-sized enterprises in achieving their business goals via its Business Banking offerings and also helping high-net-worth customers invest to maximum advantage through its Priority Banking division. With its strong capital and asset position, Prince Bank is equipped to be a valuable financial partner to its ambitious customers. The bank takes its corporate social responsibility seriously and is involved in numerous CSR activities, focusing on education, healthcare, the environment and culture, as well as promoting sustainable finance.
International Banker recently spoke with Prince Bank’s Chief Executive Officer and Managing Director, Mr. Honn Sorachna, about the bank’s recent progress toward reaching its goal of being the Kingdom’s dominant, forward-looking financial institution.
Mr. Sorachna, thank you for your time today….
Last year, Prince Bank launched its KHQR payment function via its mobile application, PRINCE Mobile, enabling customers to make electronic payments by scanning merchants’ QR (quick-response) codes and cross-bank payments by scanning KHQR’s code. Why did you decide to introduce such a product? And how popular has it been to date with the bank’s customers?
The KHQR payment system is an initiative of the National Bank of Cambodia (NBC) established under the Bakong system to facilitate cross-bank payments and drive financial-technology innovations in the banking and finance sectors. As one of Bakong’s members, we actively participate in all the initiatives of Bakong and the NBC. We have been working on integrating our system with Bakong. Our PRINCE Mobile App and PRINCE Merchant App now support KHQR payment scans, allowing our Prince merchants and individual customers to generate their own KHQR codes on their mobile apps. This makes it easy to receive cross-bank payments or make payments to other banks in real-time, ensuring efficient, affordable, and secure transactions for our customers.
Prince Bank has partnered with AIA Cambodia to offer its bancassurance products and has integrated AIA counters at all Prince branches nationwide to provide customers with insurance consultations. Why did you decide to expand the bank’s business model into the insurance realm? And do you believe this industry will have bright prospects over the coming years?
The main reason that Prince Bank decided to expand into the insurance realm was to provide our customers with a comprehensive range of financial services and solutions. By partnering with AIA Cambodia, we can offer bancassurance products and provide insurance consultations to our customers while they are banking with us.
As for the prospects of the insurance industry in the coming years, it is widely believed that the demand for insurance services will continue to surge as individuals and businesses become more aware of the risks and uncertainties they face. Additionally, the emergence of new technologies and changing consumer preferences are expected to drive innovation and growth in the insurance sector. And Prince Bank’s move into the insurance industry is a strategic one that positions us to capitalise on these trends and better serve customers.
The bank also recently launched a payment function on the WOWNOW food delivery app. What does this allow bank customers to do now that was previously impossible?
With the launch of the payment function on the WOWNOW food delivery app, Prince Bank customers can now pay for their food orders or online shopping directly through their Prince Bank account. This was previously impossible as customers had to use other payment methods, such as credit cards or e-wallets. By integrating the payment function with Prince Bank’s system, customers can enjoy a more seamless and convenient experience while being assured of secure transactions.
Is there any specific offering launched by the bank, or soon to be launched—digital or otherwise—that you would like to highlight? What makes this offering so special?
Yes, there is an upcoming new product from our bank called Clever Savings Account, which offers particular and fantastic deals for savings plans, providing customers with higher interest rates and medical-insurance protection. This account will help instill good financial prudence, starting with good savings habits. What sets this account apart is its innovative tiered structure, which includes three savings plans: Silver, Gold, and Emerald. Customers can earn higher interest rates by making monthly top-ups and upgrading their savings plan from year to year. The Clever Savings Account will help customers develop sound savings habits to achieve their financial goals and receive protection at the same time, all while enjoying higher interest rates and hassle-free banking experiences. With this, we also hope to create a broader awareness and cultivation of good money management and savings amongst Cambodians.
If I’m not mistaken, Prince Bank was the first to partner with the government-owned Credit Guarantee Corporation of Cambodia (CGCC) to offer special loans to troubled SMEs (small and medium-sized enterprises) that were weathering the challenges of the COVID-19 pandemic. What are some of the critical features of the CGCC, and what are some of the main ways SMEs have benefited from this facility?
Yes, that’s correct! Prince Bank has partnered with the Credit Guarantee Corporation of Cambodia to offer particular loans to small and medium-sized enterprises affected by the COVID-19 pandemic. As the Participating Financial Institution (PFI) of the Business Recovery Guarantee Scheme (BRGS), Prince Bank has disbursed US$112 million to 1,248 SME owners out of US$350 million loan disbursed in 2022. This initiative has been particularly beneficial for SMEs struggling to weather the challenges of the pandemic, providing them with much-needed financial support to stay afloat during these difficult times. They can apply for business loans at Prince Bank with affordable interest rates and conditions by having CGCC act as their loan guarantor for up to 80 percent of the loan amount borrowed, without any collateral required.
How different are the digital-banking solutions designed for the bank’s retail-banking customers from those designed for its commercial-banking customers? Can you briefly describe the bank’s most exciting and disruptive digital offering for each sector currently?
The digital-banking solutions that are being designed for our retail-banking and commercial-banking customers are quite different from each other. Retail banking focuses on providing a seamless and personalised customer experience through various digital channels, such as the PRINCE Mobile App and ATMs and CDMs (automated teller machines and cash deposit machines). Some of the most exciting digital offerings in this space include personalised financial insights and recommendations based on customer behaviours; real-time alerts and notifications of transactions; and daily payment tools.
On the other hand, for commercial-banking customers, the focus is on providing more advanced and complex digital solutions to help them manage their finances more efficiently, whereby we have two mobile banking apps—the PRINCE MobileBiz App and PRINCE Merchant App, which include tools for cash-flow management, supply-chain financing, international payments and retail-branch management, among others. Overall, we are investing heavily in digital solutions to remain competitive and meet the evolving needs of our customers. Whether through personalised customer experiences or advanced financial-management tools, these offerings are helping to drive innovation and transform the banking industry.
According to your LinkedIn profile, you have been at Prince Bank for eight years in the capacities of chief executive officer and managing director. What has been your biggest challenge as a banking leader during this time—and your biggest accomplishment?
As a banking leader at Prince Bank for the past eight years, my biggest challenge has been adapting to the rapid, ever-changing technology in the industry. With the rise of digital banking and fintech (financial technology) startups, it has been crucial for us to stay ahead of the curve and continuously innovate to remain competitive. Talking about accomplishments, I have been leading the bank through a successful transformation from a microfinance institution to one of the fastest-growing commercial banks, significantly expanding our market share and presence in the Kingdom. This has allowed us to serve our customers with better offers and more comprehensive financial solutions. And we are indeed very thankful for all the support we have received from shareholders, customers, business partners and employees throughout the last eight years.
As a member of the Association of Banks in Cambodia (ABC), Prince Bank is also a signatory to the Cambodian Sustainable Finance Principles. Can you briefly explain the importance of these principles? And what are some of the most important objectives in terms of sustainable finance that the bank must achieve to remain in compliance with them?
Yes, Prince Bank is a signatory to the Cambodian Sustainable Finance Principles, which aim to promote sustainable-finance practices in the country. The principles outline guidelines and best practices for financial institutions to follow to contribute toward sustainable development and environmental protection. The most important objectives that Prince Bank seeks to achieve to remain in compliance with the principles include promoting sustainable business practices among our customers; incorporating environmental and social considerations into our lending and investment decisions; and reporting on our sustainability performance. We are also expected to contribute toward developing a sustainable-finance market in Cambodia and support the country’s transition to a low-carbon and resilient economy. By adhering to these objectives, Prince Bank can help create a more sustainable future for Cambodia.
The bank’s 2022 Annual Report also confirmed that 1,075 staff were employed. Please briefly describe some of the main training resources and facilities available to them. And given the bank’s aggressive transformation into becoming a digital-banking institution of excellence in Cambodia, are the staff roles within the bank quickly evolving? If so, how does this affect the training material provided to them?
In terms of training resources and facilities available to the bank’s employees, Leadership Excellent and Performance (LEAP) is our flagship training programme, offering extensive in-person training to all employees, from entry-level officers to senior management, and is aimed at preparing our employees for their next career moves and becoming influential leaders. The program consists of multiple modules that are categorized according to leadership roles based on job levels. And indeed, the nature of staff roles is constantly evolving with our transformation into a digital-banking institution. We have updated and modified our training materials to include digital skills and knowledge, so all employees can access digital learning opportunities through the e-learning system or HR In the Pocket app, which can be accessed remotely using mobile phones or laptops. We believe this initiative will enable us to keep up with the evolving nature of the industry, thereby empowering our employees to excel in their respective roles.
The bank’s corporate social responsibility (CSR) commitments have led it to actively support local communities, particularly via the Samdech Techo Voluntary Youth Doctor Association (TYDA). What are some of the key goals of the TYDA? Also, do you have any results or statistics demonstrating the importance of your involvement in this project?
Prince Bank has actively supported the Samdech Techo Voluntary Youth Doctor Association since 2019. The TYDA is a project initiated by the Cambodian government to provide free healthcare checks and medical treatment for communities in rural areas without access to medical treatment. Its goal is to alleviate the healthcare financial burdens of needy families across the Kingdom. Prince Bank is a socially responsible organisation, and we are honoured to have the opportunity to support this project by contributing toward improving healthcare for Cambodian citizens. From 2019 to 2022, we supported the TYDA with a donation of US$300,000 to provide medical aid to over 40,000 people, and we hope our contribution to this initiative has benefited the lives of numerous Cambodians who require medical assistance.
Prince Bank recently added two more branches to its nationwide network, so it now commands a total of 35 branches and 83 ATMs across the Kingdom of Cambodia. Are you satisfied with this current level of coverage, or are you anticipating further expansion? And how does a Prince Bank branch today compare to or differ from one that would have been established eight years ago?
At Prince Bank, we constantly seek to expand our network to serve our customers better. Our 36th branch will be opening soon to increase our coverage even further. Over the past eight years, we have grown significantly from our humble beginnings, with only five branches, to our current total of 35 active branches and 83 ATM locations nationwide. Additionally, we have launched three mobile banking apps to assist individual and business customers based on their unique needs. Our commitment to exceptional customer service has remained constant throughout this growth, and we are excited to continue expanding our reach to meet our customers’ needs.
According to official figures, Cambodia’s gross domestic product (GDP) expanded by 5.3 percent in 2022, following a 3-percent expansion in 2021. Do you believe the economy can continue to grow at such a solid rate this year? And if so, do you believe this growth will be reflected in more positive financial results for the bank in 2023—for example, a similar growth in customer deposits as was observed last year?
It is difficult to predict with certainty whether Cambodia’s economy can continue to grow at the same solid rate in 2023. Factors such as global economic conditions, political stability and unforeseen natural disasters can all impact economic growth. However, there are some positive indicators, so barring any unforeseen circumstances, it is possible. For instance, the country’s tourism industry has steadily recovered since the pandemic, and the government has implemented policies to boost domestic consumption and investment. Additionally, Cambodia has been attracting more foreign direct investment (FDI), particularly in the manufacturing sector, which could help drive economic growth.
As for whether this growth will be reflected in more favourable financial results for the bank in 2023, it is certainly possible. If the economy continues to grow, this could lead to more business opportunities and increased demand for banking services. However, it is essential to note that many factors can affect a bank’s financial performance, and economic growth is just one of them. Other factors, such as interest rates, competition and regulatory changes, can all impact a bank’s bottom line.
According to its 2022 annual report, Prince Bank “clearly understands that effective corporate governance is critical for the Bank to properly function. Therefore, the Bank has adopted the best corporate governance practice in the banking industry”. Please elaborate on this “practice” and why you believe it is the best in the industry.
Corporate governance is one of the key pillars of how we spearhead Prince Bank. Our stringent governance controls include diverse, high-calibre professional directors comprising two shareholders, three independent non-executive directors and one non-independent executive director. Our board committees—such as the Board Nomination and Remuneration Committee; the Board Risk Management and New Products Committee; and the Board Audit and Compliance Committee—provide checks for the management’s business operations. Additionally, our paid-up capital is substantially higher than those prescribed by the National Bank of Cambodia and now stands at US$250 million, well above the minimum regulatory requirement of $75 million for a commercial bank, and our total assets are over $1,050 million.
Certainly, these are remarkable achievements. Thank you again for your time, Mr. Sorachna.