Taiwanese Bank SinoPac To Acquire 100 Percent of Amret Microfinance In Cambodia
Taiwan-based Bank SinoPac, a subsidiary of SinoPac Holdings, is set to acquire 100 per cent equity of Amret Plc, one of the biggest microfinance institutions in Cambodia (ranked among the top ten) for more than half a billion dollars.
This announcement was made in a press release by SinoPac, stating that the board of directors of SinoPac Holdings has approved the decision to acquire Amret Plc in three tranches with the final buyout due to be completed within three years of the deal's approval.
In the first tranche, SinoPac will acquire 80 per cent of Amret's equity for approximately USD $435 million, followed by two additional tranches of 10 per cent each, at the end of the first and second years, respectively.
Why Is SinoPac Buying Amret In Cambodia?
SinoPac stated in its press release, 'Amret has a broad product suite covering traditional banking products, as well as an emerging digital capability.'
SinoPac Holdings, the owner of SinoPac Bank, stated that the rationale behind this acquisition is to boost overseas revenues and expand its international presence.
“The Cambodian economy is one of the fastest-growing economies in Asia, with the IMF forecasting a compound annual growth rate of 6.3 per cent for Cambodia's GDP from 2023 to 2028. Additionally, Cambodia has one of the most attractive demographic profiles in Asia, which will support long-term growth,' it said.
Amret is Cambodia's largest microfinance deposit-taking institution in terms of total assets, and Bank SinoPac, as an existing lender to Amret since 2017, will be able to expand its overseas service network in Southeast Asia through this acquisition.
Amret's current major shareholders are international development finance institutions specialising in sustainable and responsible investment for financial inclusion, upholding industry-leading customer protection standards.
Over the two years following this acquisition, the International Finance Corporation (IFC), the private sector investment arm of the World Bank Group, and FMO, the Dutch Development Bank, will continue to be shareholders and partners in Amret.
The bank affirmed, “Bank SinoPac looks forward to collaborating with them, continuing with ESG investment and client protection policies. Looking ahead, Bank SinoPac can further broaden its positive influence on sustainable finance by strengthening its ESG capabilities.”
Bank SinoPac added that by combining its resources and management expertise with Amret, the latter will be fully equipped to provide more diversified and convenient financial services to enhance customer value.
“This acquisition will also enable Bank SinoPac to extend its overseas network and exert a more positive influence on sustainable finance. We hope to work together to achieve our corporate vision of ‘Together, a better life’,” it added.
Bank SinoPac's acquisition of Amret was facilitated by HBS LAW group in Cambodia. Patrick Smith, Senior Partner and Head of Banking & Finance at HBS LAW, stated that the purchase price demonstrates foreign financial institutions' keen interest in investing in Cambodia.
Amret’s Growth in Cambodia
Amret's roots go back to a modest rural loan initiative set up in 1991 by a French organisation called GRET (Recherche et d'Echanges Technologiques) in just three provinces. It became a full subsidiary of Advans Group in 2015, and its assets grew to USD 1 billion in 2019.
As of the start of 2024, Amret had 150 operating branches in 24 provinces across Cambodia, with total assets of approximately USD $2 billion.
The press release from SinoPac further stated that the completion of this acquisition is subject to the satisfaction of customary closing conditions, including relevant regulatory approvals.