National Bank of Canada Mandatory Reserves Coverage (MIGA-15469)

Countries
  • Cambodia
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • Multilateral Investment Guarantee Agency (MIGA)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Approved
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
B
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Jan 27, 2025
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
National Bank of Canada
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Finance
  • Industry and Trade
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Guarantee
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 300.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Primary Source

Original disclosure @ MIGA website

Updated in EWS Aug 1, 2025

Disclosed by Bank Apr 30, 2025

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

According to the Bank’s website, on January 31, 2025, MIGA signed a contract issuing guarantee totaling USD 300 million to National Bank of Canada (NBC) for their equity investments (including retained earnings). The MIGA guarantee will cover Expropriation of Funds for mandatory reserves in its subsidiary in Cambodia, Advanced Bank of Asia Limited (ABA) for a period of 3 years.

The Project reflects continued partnership between ABA and MIGA, as well as ABA's continuing effort to support lending to women and women-led/owned businesses in Cambodia. The Project will contribute to closing the very large SME financing gap in Cambodia, which is estimated at around US$5.2 billion equivalent to 22% of GDP. Lack of financing was reported to be the top challenge for SMEs, including for WSMEs, when starting a business. Commercial banks have prioritized lending to large corporates at the expense of SMEs which are perceived as being riskier due to lack of immovable collateral, informality of smaller enterprises and lack of reliable financial information. Women-led/owned enterprises continue to face significant obstacles such as the high cost of starting a business, heavy licensing requirements, a weak insolvency framework, non-transparent practices, and lack of competition. The Project is expected to support ABA to grow its WSMEs and women retail banking portfolios, thus increasing access to finance to these segments, with 100% of the MIGA enabled loans targeted towards women.

Early Warning System Project Analysis
For a project with severe or irreversible impacts to local community and natural resources, the Early Warning System Team may conduct a thorough analysis regarding its potential impacts to human and environmental rights.

This project is categorized as FI-2 under MIGA's Policy on Environmental and Social Sustainability (2013). ABA provides financial products and services to retail and corporate clients in Cambodia. The sectors supported by ABA are considered to have limited environmental and social (E&S) risks and impacts that are generally site-specific, reversible and can be addressed by mitigation measures. The MIGA guarantee supports the bank's general lending activities.

The main E&S risks of this project relate to ABA's ability to identify, assess, and manage the E&S risks and impacts associated with its lending activities and the management of labor matters at the bank. The applicable E&S requirements for this project are: (i) MIGA Exclusion List; (ii) applicable E&S laws and regulations in Cambodia; and (iii) MIGA Performance Standards (for eligible corporate transactions).

ABA provides financing mainly to small and medium enterprises, with some limited lending to small corporates. The sectors financed include wholesale and retail trade, real estate, services, hospitality, transportation and storage, construction, and manufacturing. These sectors are mostly medium-risk sectors, with limited E&S risks and impacts. ABA has no exposure to activities on the MIGA Exclusion List.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

A contract issuing guarantee totaling USD 300 million to cover Expropriation of Funds for mandatory reserves in the client's subsidiary in Cambodia, for a period of 3 years.

Financial Intermediary
A financial intermediary is a bank or financial institution that receives funds from a development bank. A financial intermediary then lends these funds to their clients (private actors) in the form of loans, bonds, guarantees and equity shares. Financial intermediaries include insurance, pension and equity funds. The direct financial relationship is between the development bank and the financial intermediary.
Private Actors Description
A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

National Bank of Canada (NBC), based in Canada, is one of the largest and systemically important Canadian financial institutions with total assets equivalent of USD 328 billion as of 2024. Its subsidiary bank, Advanced Bank of Asia Limited (ABA), outside of Canada is required to maintain reserves at the central bank of Cambodia, based on its volume of customer deposits. Mandatory reserves contribute to NBC's overall risk-weighted assets (RWA) at the consolidated level, resulting in less headroom for other assets at a given level of capital.

Private Actor 1 Private Actor 1 Role Private Actor 1 Sector Relation Private Actor 2 Private Actor 2 Role Private Actor 2 Sector
- - - - ADVANCED BANK OF ASIA LIMITED Subsidiary -

Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

No contacts available at the time of disclosure.

ACCESS TO INFORMATION

You can submit a request for information disclosure at: https://www.miga.org/contact/access_to_information

You can also request general information about MIGA and for information on guarantees by emailing: migainquiry@worldbank.org

ACCOUNTABILITY MECHANISM OF IFC/MIGA

The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org

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