CitiBank To Provide Global Custody Services for Central Bank

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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