Mortgage applications up 50% in third quarter

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Mortage credit applications rose sharply in the period ending September 30 even as construction loans dipped. Heng Chivoan

Mortgage credit applications saw a sharp 50 per cent quarter-on-quarter jump in the three months ended September 30, according to the latest edition of the Credit Consumer Index Report published by Credit Bureau (Cambodia) Co Ltd (CBC) on November 6.

Incorporated on November 29, 2011, the CBC is an independent provider of financial information, analytical solutions and credit reporting services to the Kingdom’s financial institutions and consumers.

As of September 30, the number of consumer loan accounts had inched up 0.28 per cent to 1.27 million from June 30, CBC reported. Of these, 10.58 per cent were for mortgage loans.

The report showed that the total consumer loan balance in Cambodia came to $9.11 billion (up 4.35 per cent quarter-on-quarter), of which mortgage loans captured the lion’s share of 51.51 per cent, while personal finance loans accounted for 47.90 per cent.

Acleda Bank Plc president and group managing director In Channy told The Post on Wednesday that as of October 31, his bank had outstanding loans to the tune of $4.09 billion for 415,202 customers.

The bank had doled out $162.73 million in housing loans for 6,501 customers, accounting for 3.98 per cent and 1.57 per cent of the value and volume, respectively, of total loans, he said, adding that the average size for housing loans was $25,032.

He noted that as of October 31, 2019, it had outstanding loans to the tune of $3.66 billion for 399,708 customers.

It had then provided $188.06 million in housing loans to 7,522 customers, accounting for 5.14 per cent and 1.88 per cent of the value and volume, respectively, of total loans then, he said, adding that the average value of housing loans was $25,001.

“Acleda Bank is noticeably quite conservative – it hasn’t provided many loans for housing finance. There were less of the loans this year than last.

“Housing loans are long-term – the more we provide them, the higher the degree the maturity mismatch between our assets and liabilities will be.

“Be that as it may be, Acleda bank does put a conscious focus on first-time home owner financing,” Channy said.

Meanwhile, Shin Chang-moo, the president and CEO of South Korea-owned Phnom Penh Commercial Bank Plc (PPCBank), said the share of volume of loans that his bank provided to the property and construction sector dipped to 22 per cent at the end of the third quarter.

He said: “We are trying to diversify the credit portfolio by number of borrowers and by sectors as a primary measure of risk mitigation.

“As a result, our exposure to construction and property sector slightly decreased to 22 per cent, while consumer credit – including housing and car loans – increased to 13 per cent as of the third quarter of this year.

“At the same time we are closely monitoring the property market on a regular basis in order to control the risk parameters such as the loan-to-value-ratio [LVR].

“There are pessimistic views on the economy next year prevailing among business community regardless of industry or sector.

“We are also uncertain when it’ll start to turn around and pick up. But I firmly believe that we as a commercial bank can play a small role to help make it happen.”

Capital investment in the construction sector climbed 13.26 per cent year-on-year to more than $3.84 billion in the first half of this year, the Ministry of Land Management, Urban Planning and Construction reported.

It said it received 2,522 applications for construction projects during the period, up 475 or 23.20 per cent from the 2,047 received in the first half of last year.