Annual report 2008-OK-B-up.qxp - Canadia Bank Plc.

PRESIDENT’S AND CEO'S REPORT
Distinguished clients, shareholders and friends of CANADIA BANK PLC,
During the year 2008 the world has experienced the worst financial and economical crisis since late 1920/
early 1930. What has all started as "sub-prime" problem in the United States in mid-2007, spreading to
other countries like Great Britain, continental Europe and industrial countries all over the world, has been
turned into negative growth domestic product (GDP) development in many countries in 2008 and will
continue during a large part of 2009. Major stock markets lost more than 50% of their value, real estate
investment gains of the last 5 - 10 years have been erased. Raising unemployment worldwide was not
much of a factor in 2008, however will hit new heights within the first 6 months in 2009, but is predicted
to ease in late 2009 / early 2010.
While I write this statement there seem to be hope that this "man-made" crisis slowed down recently and
will bottom out soon. Many well respected economists world-wide see reasons for optimism for a
consolidation and recovery of the financial and economical gloom and doom of the past 18 months.
Developing countries like Cambodia could not escape this global turmoil, however the effects were more
indirect than direct. Cambodia has been hit less than other countries like Singapore or Thailand, since
these countries are more a player in the globalization. Our banking & finance sector has been largely
shielded from the global financial systems and thus more or less bypassed. However less demand in
garments and apparel, less arrivals of tourists and the slow down of constructions have caused raising
unemployment and less income for the general public. Agriculture has been a bright spot in Cambodia's
economy, employing about 60% of the workforce and absorbing a large number of jobless people from
other sectors, who have returned to their provinces to help their families in the fields.
The banking & finance sector remains healthy and stable. The regulating authorities have promptly taken
the necessary actions and measures to assure that liquidity, equity and other important ratios in the
sector were secured. The average capital adequacy ratio for Cambodia's commercial banks in 2008 stood
at 28%, well above the benchmark of 15% and this represents a top level worldwide in the banking
industry.
Achievements and goals
With our strong commitment to our core values, vision and mission we have again achieved outstanding
results in many aspects in 2008. Compared to 2007 net-profit attributable to shareholders improved by
10% to US$ 22,1 million, total assets grew by 6% to 583,6 million, total deposits rose to US$ 462,1 million,
shareholders equity "Tier1" increased to US$ 95,2 million and "Tier2" to US$ 102,3 million, the operational
network expanded from 16 to 25 branches and the number of employees increased from 602 to 803.
Despite the fact that especially in the second half of 2008 banks in general looked more prudent at loan
applications, our "net" loan portfolio increased by 17,5% to US$ 391 million. That reflects also the
confidence of our bank in the Royal Government of Cambodia, the stable, secure and safe political climate
of our country, its economical potential and overall social goals.
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Annual Report 2008