Managing Growth MANAGING GROWTH CONTENTS 2019 was a good year in many aspects. Managing Growth 1 We opened 6 branches, our staff number grew Message from the Chairman 2 to 532, several new products and services were introduced - including Micro Credit, Vattanac Message from the President 4 Merchant Wallet and opening of 5 tax counters at GDT’s branches, our loans grew by 39%, our Executive Director/General Manager’s Report 8 deposits increased by 13%, and our profit rose by 99% to $12.8 million. Key Financial Highlights 10 We recognize the need to do better and to make Business Review 12 banking more convenient, conscious of the need to grow in a sustainable manner to earn the trust Giving Back 26 and confidence of our customers. We expect 2020 to be an interesting and challenging year. Corporate Information 30 Corporate Governance Structure 32 Board of Directors’ Profile 34 Corporate Governance 40 Audited Financial Statements 64 Growth 2012-2019: Total Assets Deposits from Customers Gross Loans & Advances Annual Report 2019 1 Managing Growth Managing Growth Statement to Stakeholders Message from the Chairman Appreciation In 2019, Cambodia’s economy grew by 7.1%, Vattanac Bank would like to express its deepest driven by growth in key sectors such as garment, gratitude to the Royal Government of Cambodia construction, tourism and agriculture. The for its effort in promoting the banking industry banking sector also had a role in enhancing and in Cambodia. developing the national economy by providing capital for business expansion. As a local bank, At the same time, we would like to express our Vattanac Bank expanded its branch network in sincere thanks to the National Bank of Cambodia Phnom Penh and the provinces, developed new for facilitating and making recommendations products, worked with private and public partners, for strengthening the banking sector in enhanced Information Technology infrastructure, Cambodia in line with the global economy strengthened corporate governance, internal control system and risk management, and further Vattanac Bank appreciates the discipline, improved customer service. loyalty, commitment, hard work and dedication of the management and staff of all levels in achieving significant progress in 2019. 2020 Target “...Vattanac Bank will continue In 2020, Cambodia’s economy is projected to We would like to express our deepest gratitude to adhere to its long-term vision be adversely impacted by Covid-19 and the to the shareholders, business partners and by undertaking its business in slowdown in the garment and construction customers who have always supported and a responsible, transparent, sectors. Despite these circumstances, Vattanac trusted Vattanac Bank from the beginning. Bank will continue to adhere to its long- professional and prudent term vision by undertaking its business in a manner...” responsible, transparent, professional and prudent manner in order to gain confidence of LOK OKNHA SAM ANG the government as well as the general public, LOK OKNHA SAM ANG CHAIRMAN CHAIRMAN thus contributing to the promotion of financial inclusion and strengthening the banking sector in Cambodia. Vattanac Bank is committed to maintaining a service culture to further enhance its prestige. 2 Annual Report 2019 Annual Report 2019 3 Managing Growth Managing Growth Statement to Stakeholders (Continued) Message from the President Long-term Banking Business In 2019, Cambodia maintained its positive Since the establishment of Vattanac Bank in 2002, economic growth with the remarkable we have been witnessing a steady development development in the banking sector. This positive of the banking sector in Cambodia. At the same development was the result of the government’s time, Vattanac Bank has been progressing as policy to maintain political stability and peace. well. The Bank was once a small local bank with Vattanac Bank strived to develop its business only 15 staff. As at end 2019, it had 17 branches to become a financially strong bank trusted by with a total of 532 staff. The Bank will continue customers. to expand its branch network in the future. In 2020, the Bank plans to open 6 more branches. The expansion of our branch network is one of the strategic drivers of the bank’s long-term business growth. It is also a strategy to promote the Bank’s image and reputation. Financial Performance As at 31 December 2019, Vattanac Bank had total The Bank not only expanded its branch network assets of US$720.7 million, an increase of 13% but also developed a wide range of products compared to 2018. Loans amounted to US$362 and services to compete in the market and million increasing by 39%, while Khmer Riel provide more convenience to its customers. “Vattanac Bank strived to loan accounted for 11% of total loans, and total Nowadays, the advancement of information develop its businesss to customer deposits amounted to US$614 million technology has changed the way people live, become a financially strong increasing by 13%. Profit before tax stood at work, socialize, and conduct business globally. US$12.8 million increasing by 99%. In addition, In Cambodia, we have been witnessing this bank trusted by customers.” the Bank complied with all NBC regulations. change in many businesses, including the banking business. Thanks to development LOK CHUMTEAV OKNHA CHHUN LEANG in Information Technology, digital banking PRESIDENT products and services have been developed to facilitate customers’ banking transactions. Under this circumstance, Vattanac Bank has put an effort to digitalize its products and services to meet the needs of its customers in the digital era. We have invested in IT infrastructure and human resources to implement our digital product development project. We believe this investment will further enhance the image and reputation of Vattanac Bank in the banking sector of Cambodia. 4 Annual Report 2019 Annual Report 2019 5 Managing Growth Managing Growth Statement to Stakeholders (Continued) Message from the President (Continued) Long-term Banking Business (Continued) Appreciation In order to develop a sustainable business, We would like to take this opportunity to express Vattanac Bank has also recruited additional our sincere appreciation to the dedicated Board qualified staff to support its growing banking of Directors for setting goals and spearheading operations. Staff are selected based on their improvement in all aspects of our work to work experience, skills and knowledge and once enhance our business performance. The positive Vattanac Bank’s they join the Bank, they are encouraged to results were achieved through the concerted attend training courses to further develop their effort of the management and staff of Vattanac Corporate Mission capacities to enable them to contribute to the Bank. We hope that management and staff will Vattanac Bank’s Corporate Mission is to conduct growth of our banking business. continue their good work and with added vigor business operations with honesty, integrity, perform their roles and duties to bring greater efficiency and accountability to its stakeholders. Vattanac Bank is also proud to provide customer success to Vattanac Bank in the coming years. Vattanac Bank ensures sustainable, safe and service in a professional manner. We always healthy growth and aims to be regarded as a strive to ensure that our banking service not In particular, we would like to express our deepest strong and secure financial institution. only meets but also exceeds our customers’ gratitude to the Head of the Royal Government needs and expectations. Over the years, we have for providing wise leadership and the National always been highly regarded by our customers. Bank of Cambodia, which has always supported This has contributed to enhancing the reputation and provided good recommendations to Vattanac of Vattanac Bank as a Personal Bank. Bank. Vattanac Bank continues to support community Lastly, we would like to thank our customers and welfare activities. We have sponsored several partners for their loyal support, confidence and events under the initiatives of some governmental trust in Vattanac Bank. We look forward to their and non-governmental organizations. Moreover, continued partnership with Vattanac Bank. Vattanac Bank has organized its own health awareness talks for the benefit of its customers. LOK CHUMTEAV OKNHA CHHUN LEANG PRESIDENT 6 Annual Report 2019 Annual Report 2019 7 Managing Growth Managing Growth Executive Director/General Manager’s Report Recognition We obtained the bancassurance license In 2019 Vattanac Bank was recognized for from the Ministry of Economy and Finance its corporate governance, customer service for the operation of life insurance business and reliability in premier banking - The Best (bancassurance-referral model) in cooperation Corporate Governance Bank and Best Customer 2019 WAS A YEAR with Dai-ichi Life, one of the leading Japanese Service Bank by International Business life insurers. Magazine; the Best Customer Service Bank by OF GROWTH Finance Derivative; and the Most Trusted in We participated in Cambodian Shared Switch Premier Banking Solution by Global Business MR. CHAN KOK CHOY and Bakong system under the National Bank of Insight. EXECUTIVE DIRECTOR/GENERAL MANAGER Cambodia’s initiatives. Outlook in 2020 Digital Banking and Customer Service In 2020, we plan to open 6 new branches, We started our Mobile Banking project and including Suong, Pochentong, Kampong Thom, plan to launch the Mobile Banking app in the Pailin, Poipet and Kampong Chhnang Branches. third quarter of 2020. To improve customer We will launch Vattanac Consumer Wallet and service experience we are also re-developing our Mobile Banking and expand our bancassurance Introduction Growth Initiatives internet banking. business. We will increase tax payment services 2019 was a good year for both Cambodia and New Branches (to include E-tax payments) and establish new Vattanac Bank. The national economy grew at 2019 was a year of growth. We extended our On Card services, we improved on the acquiring partnerships with the Electricite du Cambodge 7.1%. Vattanac Bank responded positively and customer reach with the opening of 6 branches, of Visa, Mastercard and Union Pay (UPI).