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Managing Director & CEO's Report


Dr. SVAY Hay, Managing Director & CEO of ACLEDA Bank Lao Ltd.

"ACLEDA Bank Lao Ltd. ('ABL') celebrates its 2008-2019 11th anniversary of progressive operations with the most secure financial services, extensive office networking capabilities, widely available ATMs, Electronic Banking Services ('EBS') and sustainable growth together with our loyal customers. To be the leading SME bank in the Lao PDR, we are assiduously developing easy-to-use SME loan products, mobilizing funding and introducing advanced FinTech Mobile applications. 'ACLEDA ThanChai' has enabled ABL to serve more customers in all segments of the community to undertake banking transactions Anyday Anytime Anywhere. Ranked as the No.1 commercial bank contributing to Laotian employment in the industry, we have invested in staff capacity building, optimum infrastructure and the most modern banking technology, so the Bank is capable to respond to all stakeholder's needs, our valued customers and the SME sector in particular"

Performance in 2019

Competitive Environment

Laos, with its abundant beauty and rich resources, is one of the fastest growing economies in East Asia and the Pacific. The Lao PDR remains a market of significant interest for investors in banking and financial services under the current regulatory environment with relative high competition among 43 banks, 127 licensed microfinance and 61 financial institutions in the MSME sector. There has been rising competition in both price and service quality in the FinTech arena due to innovation and a healthy marketing mix. The Bank of the Lao PDR ('BoL') has updated regulations and leveraged free market principles for the banking industry, notably the removal of the interest rate ceiling and gap between loan and deposit rates. The required minimum capital, increased by about two-thirds, was revised under the new Banking Law to be implemented over a timeframe of up to five years. Use of the local currency (the Lao Kip or LAK) is encouraged; however, there are less restrictions on credit facilities in foreign currencies. The latest challenge to the financial sector is the required collateral using hard land-titles which may limit opportunities for customers to access finance at a preferred cost. However ACLEDA Bank Lao Ltd., with an expansive infrastructure of physical offices in 15 provinces and cities, our established ATM network, EBS and the advanced Mobile App ACLEDA ThanChai, means we remain well positioned as a transparent service provider and a market innovator.

Operational Performance

  • ACLEDA Bank Lao Ltd. posted a net profit after tax (NPAT) of US$ 3,897,355 (or US$ 3,832,728 under the standard of IFRS 16) in 2019 in both attractive and challenging operational environment.
  • ABL continued its cost reduction and risk control efforts to maximize income properly.
  • FinTech Products integrated ABL's electronic banking infrastructure, offering ABL's customers a range of choices to manage their financial resources effectively from anywhere at anytime as needed to conduct business transactions with a high level of security. ACLEDA ThanChai registered 40,748 users by December 2019, a substantial upward trend after its public launch on June 25, 2018.
  • Total loans outstanding as of December 2019 was US$ 131.76 million or up 14%, compared with the previous year, of which US$ 21.63 million or 16.42% was lent to the agricultural sector.
  • Non-Performing Loans (NPL) were low at 1.35% while that of the overall banking sector was higher.
  • ABL maintained a relative high level of liquidity even with a record level of loans over the Bank's 11 year history.
  • Total deposit mobilization, consolidated in US Dollas, increased about 35% to US$ 112.20 million. The growth was mainly led by optimizing office networking, 56 ATMs with 45,374 card holders, and increased usage of the advanced Mobile App ACLEDA ThanChai which has 40,748 registered users.
  • ABL posted a record profit, which resulted from our high margin lending to retail businesses. The Bank's operating efficiency ratio was 48.72%. The return on average asset (ROAA) and return on average equity (ROAE) were 2.35% and 9.14% respectively at the end of 2019.

Challenges

The COVID-19 pandemic has impacted all business sectors globally as well as the business in Lao. ACLEDA Bank Lao won't be isolate from this either however our business model focus on SMEs. They are dealing with the daily household consumption, and we can manage the growth of our business in line with the environment.

Strategic Priorities

  1. Maintain a sustainable source of funds with conducive deposit mobilization, proactive interbank market and facilities, digital services and an emphasis on fee based income.
  2. Set clear targets of growth and maintain a strong capital base with Capital Adequacy Ratios comfortably exceeding regulatory requirements.
  3. Continually upgrade human resource assets and capacity building to concentrate on progressive knowledge, buttressed by 'ethical professional' morals. And develop our 'transparency service culture' for customers from all segments while using the Five Good Ways of Speech: speak truly, gently, usefully, at the right time, and positively.
  4. To be the leading SME bank in the Lao PDR with a focus on facilitating the delivery of SME loans, while supporting medium and larger scale businesses with proper credit processes.
  5. Superior financial services to meet our customers' needs by providing a comprehensive range of financial innovation as they move up the wealth ladder.
  6. Maintain compliance facilities with transparency, proper attitude and impartiality, with no tolerance for corruption.
  7. Build strategic partnerships with reputable counterparts, domestically and internationally, in areas where there are synergistic linkages with ABL's core business to develop capabilities and financial services.
  8. Develop and upgrade EBS with Financial Technology Solutions (FinTech) and Digital Banking-Mobile App 'ACLEDA ThanChai' allowing two way global access, self-service, and cross selling opportunities conveniently.
  9. Efficient workflow for customer satisfaction, while keeping enhanced digital oriented-approach to be the leading SME bank in the Lao PDR.

Celebrating the noteworthy year 2019 of sustained growth, I would like to highlight our most advanced mobile phone banking App, now well known as 'ACLEDA ThanChai'. ThanChai was developed with the purpose to conveniently serve customers, your family, colleagues and friends 24-hours a day, seven days a week. With ThanChai, you can now manage your business efficiently and execute your banking transactions Anyday Anytime Anywhere ('AAA') with reliable built-in security. To be the leading SME bank in the Lao PDR, ACLEDA Bank Lao is honored to serve customers at all levels and especially SME sectors with various types of commercial bank products including electronic banking services, individual and corporate deposits, lending to individuals, SMEs, or large scale businesses for, fund transfers, cash management, payroll and banc-assurance.

To all our customers, my colleagues on the Board of Directors, Shareholders, management and staff, our professional consultants, and not least the Government and the Bank of the Lao People's Democratic Republic, I offer my sincerest thanks both for your support in 2019 and in anticipation of a happy and prosperous year 2020.


Dr. SVAY Hay
Managing Director & CEO
March 13, 2020

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