ANZ Royal Bank is an international standards bank established by Australia and New Zealand Banking Group Limited (ANZ), a global corporation with over 170 years of international banking experience and one of the top 50 banks in the world, and the Royal Group of Cambodia, one of Cambodia’s largest corporations. ANZ holds 55% of total shares on issue and Royal Group holds 45%. ANZ Royal Bank (“ANZRB” or the “Bank”) in September 2005, commenced its banking business in Cambodia and since then, has opened 19 branches and has installed more than 126 ATMs in Phnom Penh as well as in key provinces. It is the only bank that currently provides internet banking in Cambodia and offers a range of banking products and services for both personal and business customers. ANZ Royal Bank has been awarded the 2007 Financial Insights Innovation Award by Financial Insights Asia Pacific based in Singapore, following the award given by the London publication “The Banker” as the Cambodian Bank of the Year in 2006.

The proposed investment is for an unfunded RSF of up to USD30 million with IFC and ANZRB sharing 50:50 in the potential risks arising from ANZRB’s existing and future portfolio of Cambodian agribusiness credits.

15.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	15.0
Loan
Equity

* These investment figures are indicative

ANZRB is headquarter in Phnom Penh with extensive branch network across Cambodia —Phnom Penh, Siem Reap, Sihanoukville, Battambang, Poipet, Kampong Cham and Takhmao. As of June 2009, ANZR; with the help of its 500 plus staff, had approximately 80,000 customer accounts and a credit portfolio of about $291 million, of which agribusiness comprised approximately $8.5 million or 2.9% of its total portfolio. Investments can be made through out Cambodia.

The Project is expected to have a high development impact on account of the following: The Project will increase access to finance for underserved market participants in the agriculture sector which accounts for 29% of Cambodian GDP and employs 70% of total labor force. IFC’s support to Cambodia’s agriculture sector will be instrumental in dampening the impact of the global economic downturn which has resulted in Cambodia suffering from declines in its garment exports, slow down in tourism, and collapse in the real estate market. The Project will also benefit the Cambodian government as agribusiness and its value chains will become more profitable and generate higher income taxes for the government.

Provision of Senior Guarantee: IFC’s senior risk participation provides comfort and will allow ANZRB to expand its loan portfolio to agriculture sector in Cambodia with reduced risks. Leadership in structuring the facility: IFC’s experience in both structured finance products and agribusiness financing places it in a unique position to take the lead in structuring this RSF. Demonstrating Confidence in Cambodia’s Agriculture: IFC’s risk sharing demonstrates a confidence in the agriculture sector which is a key sector in Cambodia and will encourage ANZRB, as well as other financial institution, to expand financing to the agriculture sector.

This is a category FI project according to IFC''s environmental and social review procedure. ANZRB will be required to designate individuals to monitor environment and social aspects of its portfolio activities, and will need to submit an annual environmental performance report to IFC. It will establish a social and environmental management system (SEMS) to ensure that its financing activities are consistent with: i) the Environmental and Social Risk Management Operations Manual developed by IFC-IDA and ii) applicable environmental, occupational health and safety regulations in Cambodia. In screening loan applications, where applicable, it should probe into the chemical management practices of prospective borrowers, given past incidences of fertilizer poisoning and reports of overuse in the country. Where it makes business sense, ANZRB should look for opportunities to finance sustainable agricultural projects. Demonstration of a functioning SEMS will be a condition of signing/effectiveness.