» Financial Information » Chairman's Report
"On behalf of ACLEDA Bank Plc.'s Board of Directors, I am pleased to present ACLEDA Bank Plc.'s 2015 Annual Report which provides a wide and explanatory overview of our 2015 performance, a detailed corporate governance report, and a complete set of the consolidated financial statements as of 31 December 2015."
The Year 2015
In 2015, we continued to implement our foremost goal, outlined in our five-year strategy 2015-2020, to be a unique commercial bank, the Bank You Can Trust, the Bank for the People, with a competitive edge in relevant banking markets. Transparency provides our stakeholders with confidence in the long-term returns available as we continue to support the economic growth agenda and the Rectangular Development Strategy of the Royal Government of the Kingdom of Cambodia.
ACLEDA Bank Plc. continues to strengthen its business model and facilitate the delivery of enhanced banking services to its clients in the public and private sectors that enables sustainable revenue streams into the future and ultimately benefits our shareholders.
This year, we completed the construction of our new head office and continued to enhance our e-banking services to provide outstanding services and conveniences to our customers and to be ready for ASEAN economic integration in 2016.
Standard & Poor's has maintained ACLEDA Bank Plc.'s rating at "B+" with an outlook "stable." This rate is a testament to our success in strengthening the Bank's governance, capital, franchise operations, and delivering a consistent performance.
2015 was a year of remarkable growth at all levels in ACLEDA Bank Plc. Net profit for the year ending 31 December 2015 was USD105.07 million up from USD80.37 million in 2014. Profit Before Tax for the full year 2015 hit a record high of USD132.59 million and was 29.98% higher than 2014. This growth was driven mainly by the 24.98% growth in Net Interest income and 25.26% growth in Net Fee and Commission income that stood at USD256.70 million and USD38.86 million respectively by the end of 2015.
These figures exhibit a strong growth in our banking franchise as we continue to rebalance the income stream from investment to being generated by core businesses. Non-Interest Income contribution from our operations which includes our subsidiaries based in Cambodia, Laos and Myanmar, was USD50.78 million and now accounts for 12.51% of total revenues. ACLEDA Bank Plc. delivered strong balance sheet growth in 2015 increasing total assets by 23.77% to USD3.89 billion compared to USD3.14 billion at the end of 2014. Loans and advances were up 22.71% to USD2.51 billion. Customer deposits grew by 18.76% to USD2.70 billion as of 31 December 2015 compared to USD2.27 billion at the end of 2014. Credit quality has been preserved, at an NPL ratio of 0.35%. Earnings per share were at USD0.40 by the end of 2015, up from USD0.36 in 2014. The Capital Adequacy Ratio was at 22.02% as per the National Bank of Cambodia's (NBC) regulations.
Pursuant to the National Bank of Cambodia's requirements, the Bank sets aside a risk reserve against its lending a non-distributable part of shareholders' equity. As of 31 December 2015, the risk reserve was USD323.68 million meeting the NBC's requirements. With the aim of maximizing shareholder return over the long-term, the Board of Directors is recommending the distribution of a cash dividend of 10% and a stock dividend of 40% of 2015 NPAT which equals to USD0.1977 per share to the General Assembly (AGM).
During 2015, there were a number of changes in the governance of the Group. The most significant one was Mr. John Brinsden's retirement, after serving more than 13 years on the Board of Directors. As our second Chairman, Mr. Brinsden previously had a long and distinguished career in commercial banking with the Standard Chartered Bank before joining the Board of ACLEDA Bank Plc., as Vice-Chairman in October 2000, and subsequently becoming Chairman of the Board of ACLEDA Bank Plc. in September 2014. I'm sure the shareholders, directors, and staff will join me in thanking him for his enormous contributions to the Bank and wish him and Madam Chuang Pi-Feng good health, prosperity, and happiness.
There were also a number of other changes to the Board of Directors in 2015.
Mr. Alain CANY and Mr. Vincent GROS resigned, and our thanks go to them all for the great contributions and services they have rendered to ACLEDA Bank Plc. over the years.
Mr. Cornelius OBERT and Mr. Ian S. LYDALL have been appointed as Independent Directors to comply with NBC requirements. Mr. Marc ROBERT also joined the Board as a Non-executive director.
The membership on the Board of Directors has been increased from nine to ten, and membership on the Board's committees has also been increased from two to four. Most Board committees are now chaired by an Independent Director.
The Board met face-to-face in Phnom Penh three times; in March, September, and December, and held one 'away' meeting in Yangon, Myanmar in June. In addition, 13 resolutions were passed by e-mail. Each meeting normally lasts one and a half days including committee meetings.
Significant Board decisions during the year include:
- Established the guidelines for capital strategy of next fi ve years to achieve sustainable growth of the Bank.
- Approved the consolidated financial statements of ACLEDA Bank Plc. and its Group as of December 31, 2014.
- Declared a dividend at 50% of 2014 Net Profit After Tax equal to US$40,190,445 or US$0.1782 per share payable in the form of a stock dividend. It was also agreed that the remaining balance of after-tax profits be transferred to the General Reserve.
- Approved and recommended to the Shareholders the appointment of KPMG as the Bank's Auditor for 2015, including ACLEDA Securities Plc. and ACLEDA Training Centre Ltd.
- Expanded the role of the Remuneration Committee to take responsibility for nominating and succession planning for the Chairman, Non-executive Directors and President & Group Managing Director.
- Elected Mr. CHHAY Soeun as Chairman of the Board to succeed Mr. John BRINSDEN upon his retirement.
- Admitted one new non-executive and two Independent Directors to the Board to fi ll vacancies arising from shareholder's request and NBC requirements.
- Approved the capital policy submitted by the Steering Committee for the Capital Plan for the next five years.
The strategic direction for the Group is of course a matter of constant concern for both the Board and management. Regional expansion, new products/services developments and transforming to e-banking and digital banking are our foremost strategies to tackle the fierce competition as ASEAN integration develops with markets geared towards high profit growth.
We would also like to thank our customers, shareholders, directors, executive management, and all staff of ACLEDA Group for their support and efforts in implementing the Bank's strategy and in achieving its goals and objectives. We also express our sincerest gratitude to the Royal Government of Cambodia, the National Bank of Cambodia, regulators, and all relevant authorities for their constant support and dedicated efforts to develop Cambodia's financial industry, especially the banking sector.
We reaffirm our commitment to all our customers and shareholders that in 2016 we will continue to focus on areas that represent the best opportunities for ACLEDA Bank Plc., to dedicate all our efforts to achieving a strong and sustainable growth rate, and to deliver on our strategic goals to enhance future returns as well as strengthening the position of ACLEDA Bank Plc. in the Kingdom of Cambodia and the region.
Mr. CHHAY Soeun
Chairman of the Board of Directors
ACLEDA Bank Plc.
January 25, 2016