Jeonbuk Bank’s Cambodian subsidiary logged record-high annual net profit last year, marking it as one of the most successful Korean banks operating in the Southeast Asian country, the bank’s holding group JB Financial said Tuesday.

Phnom Penh Commercial Bank’s net profit for fiscal 2019 jumped 40.5 percent on-year to 20.7 billion won ($17.4 million), according to JB Financial.

PPC Bank was the only commercial lender in Cambodia to post an annual net profit of over 20 billion won in the period amid growing competition among lenders there, JB Financial said. Around 10 new commercial banks were launched in Cambodia in the last three years, it noted.

The bank’s total assets also increased 21.8 percent on-year to 1.7 trillion won in the cited period. This is the first time a Korean bank operating there has seen its total assets surpass 1 trillion won.

Its total loans extended and total deposits increased by 24.1 percent and 15 percent, respectively, to 604 billion won and 749.3 billion won.

The swift growth of PPC Bank was due to JB Financial’s localization strategy and digital finance service, the banking group said.

The bank’s funds are locally sourced, unlike most Korean banks operating in Cambodia. Using funds sourced from Korea would allow PPC Bank to earn a larger margin, but it would restrict its business from growing due to Cambodia’s foreign currency regulations, JB Financial noted.

PPC Bank has also recently developed a digital core banking system, allowing the lender to digitalize its loan extension and management process.

In 2016, JB Financial acquired Cambodia’s PPC Bank via its flagship lender Jeonbuk Bank to offer loan services to local retail customers as well as small and medium-sized enterprises.

By Jung Min-kyung (mkjung@heraldcorp.com)