Message From CEO
We firmly believe that the combination of PRASAC’s focused strategy and diversified business model, which is unique among our competitors, will create long-term value for our stakeholders. We have a strong basis of integrity, trust and ethical behavior in all our businesses, a growing customer base and the status of largest MDI in Cambodia. PRASAC’s strength provides a solid foundation for our significant operations in various markets, which in turn further enhances PRASAC’s growth potential and expansion.
Over the past 12 months, we have faced some challenges:
- Non-Performing Loans of the entire financial sector has increased,
- Climate change (droughts since October 2015) with delayed rainfall and
- Low prices for agriculture commodities and a less profitable agriculture market.
However, our 2016 results demonstrate that our strategy continues to deliver success in this challenging environment and shows how PRASAC persists to bring our strengths and capacities to the market with the lowest NPL in the sector, high staff productivity, effectively managed costs, strong client relationships, prudent capital and risk management and highly engaged staff.
In the year 2016, PRASAC maintained its position as a market leader with the largest branch networks, highest return, an extensive loan portfolio, and a proven record of sustainable growth. Some key operational highlights include:
- Total assets at year-end were USD 1.25 billion, a growth rate of 19% percent compared with the end of 2015
- Total loan portfolios of USD 1.03 billion (a 20% increase) and approximately 347 thousand borrowers
- PRASAC maintained its leading position in loan portfolio quality in the sector with the Non-Performing Loan (NPL) rate standing at 1.16%
- The deposits outstanding balance reached USD 619 million with a total of 572 thousand depositors
- After-tax net profit increased by 16% to USD 54 million from USD 46.5 million in year 2015
- Return on Equity (RoE) of 36.9% and Return on Assets (RoA) of 4.7%
- Office network covering all 25 provinces and cities through 181 outlets, 115 ATMs, 6,162 staff and operating in more than 13,640 villages (equal to 93% of total villages).
Achieving sustainable growth
We believe our focus on innovation and technology will help enable us to extend our lead in the financial sector. In 2016, we maintained our number one market position in all key retail categories. Our scale in the financial sector affords us the opportunity to leverage services and provides our clients with an improved experience, leading to increased loyalty and improved profitability, despite the challenging macroeconomic environment.
We see an opportunity to further grow our business serving high net worth clients and SMEs including assisting many business owner clients with their progression. We also expect to prudently grow our markets’ business segments, strengthening branding, breadth and scale to enable us to continue to provide the best for our clients.
We reinvest in new core banking system technology in ways that others find too difficult. These innovations and technology drive further efficiency, enabling simple, fast service and more convenient digital operations.
Building on our strengths to grow our business
We understand the drivers of growth will be different from those in the past decade, and we feel confident PRASAC can adapt to changes and the emergence of new technologies and the changing needs and preferences of our clients.
We will stay the course in the years ahead as we look to sustain our strong financial performance record in value creation by evolving within market conditions and our client’s financial needs.
Executing on a focused & consistent strategy
Our strategy is focused and consistent to deliver high quality, sustainable earning growth. This means pursuing not just growth but sustainable growth. It also means we will pursue opportunities that are aligned to our view of local and global trends, build on our strengths and deliver strong returns to shareholders.
In the microfinance sector, we are the market leader and the largest institution by both assets and retail portfolio market segmentation. We are focused on extending our lead through our size, scale, breadth, and cross-selling ability. We are leveraging our strength and expertise to grow our business even in such a highly competitive market.
Our strategy takes advantage of our competitive strengths, including our diversified products and services, extensive distribution channels, talented workforce and high performance culture alongside risk management expertise.
Being an employer of choice
Being an employer of choice is a key to our success. Our employees are our greatest asset. By attracting and retaining talent, offering employees meaningful careers and helping them succeed, we can deliver the best for our clients each day. We have a strong culture, shared pride in our performance, a successful history, and a unique footprint coveted by many lenders and stakeholders around the world. Throughout PRASAC, employees place great value on working together and share a genuine desire to serve our clients.
I strongly believe that diversity and inclusion play a central role in driving productivity, innovation and growth. Embedding diversity in what we do allows PRASAC to better reflect the clients and public we serve, and also drives employee engagement, which is critical to our continued success. It is both moral and smart.
Our staff continues to drive results
Our success this year would not have been possible without the dedication and professionalism of our staff, whose high engagement and client focus continue to drive our results. We will ensure that we are creating a culture that nurtures innovation and collaboration, and is increasingly fast-paced, adaptive and execution-focused, in order to meet clients’ needs. We are building a better workplace for our staff that harnesses diversity and inclusion and where everyone has the opportunity to realize their full potential.
While regulatory changes, prolonged low interest rates, market volatility and increasing competition will pose some challenges, we also see opportunities. We are committed to delivering the right strategy, diversify products and services, strengthen our culture and staff to drive continued growth and take advantage of changes in the marketplace.
We are confident that our strategy is sound. By executing our strategy well, and making meaningful progress against our focus priorities, PRASAC will be in a good position to perform within the ranges of our medium-term performance objectives and create longer-term shareholder value.
On behalf of PRASAC management, I would like to thank the management team and staff for their efforts and commitment, the Board of Directors for their support and advice, and the Royal Government of Cambodia (RGC), regulatory bodies, the National Bank of Cambodia (NBC), and local authorities, who always support us.
The PRASAC’s outstanding performance in 2016 is a testimony to the dedicated effort of nearly 6,200 employees. We acknowledge their contribution and thank them for their commitment to our success.
President & Chief Executive Officer