The National Bank of Cambodia has selected CitiBank to provide global custodian services for its offshore investments.
The deal, which is the first time Citi has established a presence in Cambodia, will aim at securing the Cambodian central bank’s foreign assets as well as putting in place services in outsourcing, investment administration and accounting.
“We are extremely confident that the global custody services provided by Citi will be of major benefit to the National Bank of Cambodia as we look to expand and diversify our investments offshore,” NBC Governor Chea Chanto said in a statement.
As the global economic downturn continues to make its presence felt in Cambodia, which depends heavily on foreign investment to help bolster its economic growth, government officials are coming under pressure to provide more oversight to their overseas assets.
According to an end-of-year report released by the International Monetary Fund last month, bank deposit growth has slowed significantly in Cambodia in recent months turning negative (month-on-month) since September 2008. And yet mid-year audits by the National Bank of Cambodia reveal that risky lending activities are in fact increasing, according to the IMF.
Citi’s partnership with the Cambodian central bank hopes to control such erratic financing and is part of wider plans to increase its presence in both Asia and the Middle East. In December 2008, the bank made moves into both Bangladesh and the United Arab Emirates.
James Griffiths, a spokesperson for Citi in Asia said in an e-mail that the move underlines Citi’s “continued commitment to invest in the franchise across Asia Pacific.”
The agreement for Citi to provide global custody will safeguard investor assets in multiple countries around the world. The bank will invest most of its time in helping the National Bank of Cambodia to settle trading deals between clients and give advice on risk and investment intelligence using finance specialists in Singapore, Thailand and Hong Kong, Griffiths wrote.
Anthony Nappi, Citi’s Regional Head of Global Transaction Services, Asia Pacific, described the partnership as a “landmark deal” both for his company and for Cambodia.
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