Lao Development Bank (LDB), a government bank in Lao PDR, received two awards — “Fastest Growing Commercial Bank in Laos” and “Best Employee Welfare Initiatives in Laos” at International Finance Magazine awards. Lao Development Bank is a government bank with the largest network within the country. It has served the nation for more than two decades. International Finance Magazine invites the President of the LDB Bank Mr. Chanthanome Phommany to talk about their highly successful transformation journey.
Q: Lao Development Bank is a two decades old Government Bank. September 2021 CSE partnered with the Government. What do you think has been the journey in the last 10 months?
A: I sincerely thank the International Finance for paying attention to the new management of our bank (LDB). In the past 10 months, I would like to confirm that all parties, including the Lao government, the Bank of the Lao PDR, employees and customers have pleasantly welcomed the new board of directors with satisfaction and provided good support. We have goals and strategic plans defined in the 6-month plan before officially signing a joint venture with the government. I and the board of directors have led and managed the organization with a vision, have a complete systematic plan, focus on actual work and transform the new mechanism of the Lao Development Bank to be able to run smoothly and effectively.
Q: Can you give us some insight on how you managed such a transformation (if it is not so confidential)?
A: Definitely much of this is confidential but we can give you some examples to get an understanding of how we think now. One – we thoroughly analyzed the bank financials and business before we devise our strategies. We knew exactly how many thousand dollars are un-utilized, we calculated exact Cost of Funds, we knew what exactly effects our Cost of Funds, we could precisely tell which branch is over using funds with less returns, we could precisely see which branch over spends (in comparison to their business volumes) and so on. We have defined a clear strategy, with the work of the board of directors in a systematic manner. For all goals and action plans are defined in a standardized structure.
Two – based on all our research & analysis, we had clear and very focused strategies with the work of the board of directors in a systematic manner. Goals and action plans for all verticals & horizontals were well structured. Three – We have recruited employees with knowledge, experience and we have improved the welfare policy for employees to stimulate and encourage the performance of employees.
Q: It sounds like you had a very clear plan of action. Can you also elaborate a bit more about some of your business strategies (again, if it is not very confidential)?
A: Maybe I share some examples – We have created and trained our employees along with using modern technology to transform the new image of LDB. If we do not focus on the development of technology systems, we would really feel handicapped. In 2022, we will have improved the technology continuously and firmly. We can see the number of customers who have used our Mobile App (LDB Trust) have significantly increased.
Q: That looks to be the right balance of Technology and People, great! Technology has been a pain point for all banks in any small market. The budget never seems to be enough to justify the massive investments needed for ever-changing banking technology. What did you do in this space?
A: Thanks for asking this. A lot of this actually is highly confidential. We can still share the large picture so that you can correlate to it. We do not think the technology budget is the major challenge for our development. We have many internationally recognized and renowned technology development partners. Therefore, all we did was to choose the right tech partners and motivate them to do better.
Q: So, it looks like you had to make some bold decisions for your tech partners. Do you also want to share some of your future plans and strategies?
A: As of now, we can only say keep watching. We are determined to change the banking segment and we would surely provide what is best for our customers and for our staff.