National Bank of Cambodia

With favorable business, regulatory and policy environment, the microfinance sector hasgained significant confidence from the public including both debtors and creditors,particularly from the poor in rural areas and foreign investors. As of 31 December 2011, 23%and 77% of total registered capital is owned by Cambodian and foreign shareholdersrespectively.Total loans increased by 50% from KHR 1,724,841 million (USD 426 million) at the end of2010 to KHR 2,591,263 million (USD 641.53 million) at the end of 2011. The number ofborrowers rose by 17% from 978,077 to 1,141,913. Aggregate amount of deposits, on theother hand, surged by 180% from KHR 164,014 million (USD 41 million) to KHR 459,473million (USD 114 million) in the same period.Loans and Deposits (MFIs)Loans and Non-Performing Loans (MFIs)3,000,0002.80%3%2,591,2632,500,0002,591,2633%In Million KHR1,724,8411,244,5971,108,225617,907459,473164,01421,211 22,082 39,627Million of KHR2,000,0001,500,0001,000,000500,000-616,953 1,130,216 1,244,597 1,724,8410.19%0.42%1.18%2%2%1%1%0.22%0%2007 2008 2009 2010 20112007 2008 2009 2010 2011LoansDepositsLoansNPL RatiosThe average delinquency ratio is 0.22%, decreasing from 1.18% in 2010 despite thesevere flooding in the country in the third quarter. In compliance with the regulations ofthe National Bank of Cambodia, the average solvency ratio is 21.25 % and the liquidityratio is 398.66%. MFIs’ profitability continues to increase. In 2011, total net profit isKHR 110,117 million (USD 27.26 million), a 63% increased from the end of 2010. Return onasset and return on equity ratios were 3.64% and 15.10% respectively.4. Development in the Banking Supervision4.1 Regulatory DevelopmentThe National Bank of Cambodia revised many of its regulations and circulars to achievea more effective supervision and be in line with recent developments in financial sector.During 2011, the National Bank of Cambodia issued a circular related to net worthcalculation, and 5 other regulations, including Prakas on risk based and forward lookingsupervision, Prakas on credit information sharing system, Prakas on transparency ingranting credit facilities of banks and financial institutions, Prakas on financial leasingbusiness, and Prakas on licensing of financial lease companies.- 3 -