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ACLEDA Bank Lao Ltd.

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Managing Director & CEO's Report


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

In 2018 ACLEDA Bank Lao Ltd. (ABL) celebrated its 10-Year anniversary of progressive operations having developed the most secure financial services, and extensive office, POS and ATM network in the Lao PDR. Along the way, the Bank has transitioned from a traditional bank to becoming the preferred digital and leading SME bank in the country. With the successful launch of the advanced FinTech Mobile App 'ACLEDA ThanChai' ABL is able to serve more customers in all segments of the community and to undertake banking transactions any day, anytime, anywhere. Ranked as the No.1 commercial bank in Laos, while contributing to Laotian employment in the finance and banking industry, we have invested significant and substantial resources into staff capacity building, physical infrastructure and the most modern banking technology, so that the Bank is capable to respond to all our stakeholder's needs, our valued customers and the SME sector in particular.

Performance in 2018

Competitive Environment

The Lao PDR remains a market of significant interest for investors in banking and financial services under the current Laotian regulatory environment with relatively keen competition among 43 banks. This includes three state-owned commercial banks, one specialized bank, three joint state commercial banks, eight private banks, nine subsidiary banks, and 19 foreign commercial bank branches. Around another 180 licensed microfinance and financial institutions operate in the MSME sector. There was increasing competition in both price and service quality in the FinTech arena due to increased innovation and marketing mix. The Bank of the Lao PDR (BOL) updated regulations on ceiling for interest rates on deposits. Further consideration and discussion on the 4% gap between weighted average interest rates on loans and deposits is expected in the coming year. Use of the local currency (Lao Kip) is encouraged; however, there are fewer restrictions on loans in foreign currencies and related-lending fees for commercial banks. The requirement that hard land titles be used as collateral for loans is a recent challenge that limits the opportunities for customers to access finance at a preferred cost. However ACLEDA Bank Lao Ltd. with a multi-option financial infrastructure including an extensive network of physical branches and offices in 15 out of the 18 provinces in the Lao PDR, and with our ATMs, Point of Sales system, and the newly developed ACLEDA ThanChai, remains well positioned among market leaders.

Operational Performance

  • ACLEDA Bank Lao posted a Net Profit after Tax of US$ 2,976,263 in 2018 under an attractive albeit challenging operational environment.
  • The Bank continued its cost reduction and risk control efforts to maximize income.
  • FinTech products integrated ACLEDA Bank Plc.'s electronic banking infrastructure, offering the Bank's customers a range of choices to manage their financial resources effectively from anywhere and at anytime as needed to conduct business transactions with a high level of security. The ACLEDA ThanChai registered 24,854 users by December 2018, a noteworthy upward growth after its initial launch on June 25, 2018.
  • Total loans outstanding in 2018 was US$115.15 million of which US$17.62 million or 15.30% was lent to agriculture, among many other sectors. In 2017, agricultural loans were pegged at only US$ 2.47 million.
  • Non-performing loans were maintained below 1.50% while the overall banking sector was over 3%.
  • ACLEDA Bank Lao Ltd. maintained a relatively high liquidity during the year with fluctuations of the loan portfolio in local currency playing a greater role as SME banks focused on diversified SME credit and larger business.
  • Retail deposits and savings accounts the in Lao Kip grew by 3% and total deposits consolidated at USD83,190,346 while the number of depositors grew by about 12%. The account growth was mainly led by a new strategy and optimal business model employing 56 ATMs and 65 POS terminals throughout the country with 41,013 active card holders.
  • ACLEDA Bank Lao Ltd. posted a record profit which resulted from our high margin loans to small businesses The Bank's operating efficiency ratio was at 56.04%. Its Return on Assets (ROA) and Return on Equity (ROE) were 1.91% and 7.26% respectively at the end of 2018.

Strategic Priorities

  1. Increase the Bank's sustainable source of funds with the growth of local deposit mobilization, proactive interbank facilities, digital services and fee-based income focused on creating best customer experience by becoming simpler and more efficient.
  2. SMART goal and productivity to maintain a strong capital base with Capital Adequacy Ratios comfortably exceeding regulatory requirements.
  3. Enhance human resource assets and capacity building to concentrate on progressive knowledge and the continued institutionalization of "professional ethics" while developing our "service culture" personal accessibility for our customers, and increase our services as the market expands.
  4. Be the leading SME bank in the Lao PDR by focusing on loan diversification for SMEs and larger-scale businesses with proper credit processing.
  5. Maintain superior financial services to follow our customers' needs by providing a comprehensive range of financial innovations as they move up the wealth ladder.
  6. Offer compliance facilities with transparency, a positive attitude and impartiality, while maintaining zero tolerance for corruption.
  7. Build strategic partnerships with reputable counterparts, domestically and internationally, in areas where they are synergistic with the Bank's core business to develop new capabilities and financial services.
  8. Develop and upgrade Electronic Banking Services (EBS) with Financial Technology Solutions (FinTech) and Digital Banking-Mobile App, ACLEDA ThanChai, allowing two way global access, CRM plus new financial products/services to support self-service, applying modern technology, to generate cost efficiency, expand global businesses and customer base as well as to allow cross selling opportunities and conveniently serve more customers competitively.
  9. Provide efficient workflow for customer satisfaction and continued enhancement to be the preferred digital and the leading SME bank in the Lao PDR.

In celebration of the noticeable year 2018, I would like to highlight our new and most advanced mobile phone banking App called ACLEDA ThanChai. ThanChai was developed with the purpose to conveniently serve you, your friends and family — 24-hours a day, seven days a week. With ThanChai, you can now manage your business efficiently and execute your banking transactions from anywhere at anytime with reliable built-in security. To be the leading SME bank in the Lao PDR, ACLEDA Bank Lao has the opportunity to serve customers at all levels and especially SMEs with various types of commercial bank products including individual/corporate deposits, payroll, fund transfers, cash management, bancassurance and lending to individuals or large scale businesses.

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 2018 and in anticipation of a happy and prosperous 2019.


Dr. SVAY Hay
Managing Director & CEO
March 13, 2019

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