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Cambodian banks put holds on their lending in the fallout from the international economic crisis, but they have continued to compete for customers. CAMBODIA’S banks will see lending growth climb as much as 20 percent in 2010, with a slower growth in deposits, marking a slight recovery in the sector, said the International Monetary Fund's chief representative in the Kingdom.

John Nelmes, IMF resident representative, wrote in an email Friday. “Lending growth of between 15 and 20 percent in 2010 would be in line with a modest recovery in economic activity and a reasonable increase in loan demand.” business growth grew just 3.2 percent to US$2.42 billion in 2009, up from $2.34 billion the year before, according to National Bank of Cambodia figures. Deposits rose 32.7 percent to $3.28 billion in the same period.

Deposit growth is likely to slow as banks back away from competitive offers that have created too much cash and forced them to make large deposits in the National Bank at low interest rates, Nelmes said. “That situation cannot continue indefinitely, so looking forward, I would expect to see deposit interest rates decline, and deposit growth slow,” he said. “At the same time, lending rates may not fall very much, as banks look to rebuild their profit margins.” Yum Sui Sang, CEO of Union Commercial Bank, whose clients are mostly garment manufacturers from Hong Kong and Macau, said the bank has seen an increase in borrowing demand.