CEO message

CEO message on First Finance Annual Report 2023

We expect the economic outlook for 2024 to remain positive and grow to around 6%, with the continuing recovery of the tourist, real estate, construction, and services sectors. This relentless economic growth has been facilitated by the hard work of the Royal Government in achieving and maintaining social, political, and macro-economic stability. This has been one of the key factors to strengthen investor’s confidence both locally and internationally, and more importantly, the active involvement of the private sector as a development partner with the government.

Over the past 12 months, we have been facing many challenges (i). Clients dropped or lost their income due to the economic slowdown, especially in tourism, real estate, construction, and services, such as restaurants, guest houses/hotels, and entertainment, (ii). The slowdown of the real estate and construction sector, and (iii). Non-performing loans (NPL) of the MFI sector increased up to 11.2% while First Finance’s NPL was maintained at 6.02% by the end of December 2023.

To increase economies of scale and efficiency and maintain a strong position in the market, we will implement the following strategies, (i) Accelerate loan growth and strengthen the quality of loan books, (ii) Continue to tighten loan terms and conditions, loan processes, and approvals, (iii). Strengthen NPL Management, (iv) Increase branch and credit officer productivity, (v) Expand the branch offices network, (vi). Strengthen lenders’ relationships with loan terms and conditions, including improving lender’s reports, (vii) Seek new funding from the Development Finance Institutions and commercial banks, (viii) Continue to strengthen staff capacity, especially Branch Managers, Credit Officers, and risk staff through on-the-job, internal, and external training, (ix) Continue to improve and strengthen client protection and regularly receive certification, including promoting Corporate Social Responsibility activities, and (x) Strengthen internal control and compliance.

Continuing to build on a firm foundation.?

First Finance has a great foundation on which to continue to build; we have a strong culture, integrity, trust, ethical behavior, and shared pride in our performance; we have a successful history; and our footprint is unique and coveted by many lenders and stakeholders around the world. First Finance’s employees place great value on working together and they share a genuine desire to serve our customers.

Looking ahead

The financial industry will be further shaped by rapid innovation and disruption. We prepared for increasing capacities of data centers, Data Recovery, sophisticated cyber security, and fraud risks, as well as evolving regulatory landscapes. We will continue to strengthen the implementation of the NBC IT security guidelines.?

First Finance will continue to invest in its business, IT infrastructure, people, and branding to deliver customer-centric experiences and help those we serve with confidence about their financial future. We will also maintain a strong risk culture and focus on operational excellence and will foster our unique and inclusive culture to bring out the best in our clients and stakeholders.

Bring the best of First Finance to our clients and business partners

Sustainable growth has been key to First Finance since its foundation, as reflected in our core values, taking the interests of all our clients and business partners into account. We have seen that increasing cost efficiency, maximizing benefits, and risk mitigation are core values of First Finance. We are looking for a long-term, customized talent strategy and we will continue to build relationships with our customers to deliver added value to our business partners.

Leading through confidence

While the economic slowdown, high global inflation and interest rates, regulatory changes, market volatility, and increasing competition will pose more challenges to our business operations, we also see opportunities. We are committed to delivering the right strategy, strengthening our culture and staff capacity to drive continued growth, and taking advantage of changes in the marketplace. What these times have shown us is that our strategies are functioning well. We are more confident than ever that we chose the right strategies and have the right people to meet the challenges ahead. As we pursue responsible, sustainable growth, we strive to continue to earn the right, to bring our clients and shareholders with us on this journey through these difficult times into a more favorable future.

We are confident that our strategy is sound. By executing our strategy well, and making meaningful progress against our focus priorities, First Finance will be in a good position to perform within the ranges of our medium-term performance objectives and create longer-term stakeholder value. We will always continue to maintain our efforts to achieve excellence through cooperation, commitment, and transparency in all our dealings.

On behalf of the First Finance Management, I would like to thank the management team and staff for their efforts and commitment, the Board of Directors for their support and advice, and the Royal Government of Cambodia, regulatory bodies, the National Bank of Cambodia, and local authorities, who always support us.