Days before National Bank of Canada posted its second-quarter results on 27 May, Matthew Lee, an equity research analyst at Canaccord Genuity, named the bank’s Cambodia operations among the exposures he was watching, writing that a prolonged Middle East conflict would “disproportionately impact poorer, fuel-importing countries.” He repeated the caution on BNN Bloomberg the morning before the figures landed. They came the next day, and the segment that carries the bank’s Cambodian subsidiary had grown.
The caution arrived inside the Canadian banks’ earnings week, when profit across the six largest lenders was expected to rise between 10 and 25 percent, and it did not single Cambodia out. Lee paired National Bank’s Cambodia operations with Bank of Nova Scotia’s in Chile, and in his written note both faced the same forecast, credit and loan-growth headwinds as a conflict drove inflation and stalled investment. Cambodia entered the risk line as a member of a class, before any single bank’s numbers were examined.
The note came as Canadian bank stocks traded at their highest in 23 years and at a rare premium to U.S. peers, a premium Lee questioned the operating environment could extend. International exposures sat among the risks he weighed against it.
That exposure, for National Bank, runs through one institution. The Canadian lender bought into ABA Bank from 2014, lifted its stake to 90 percent in 2016, and took full ownership in 2019, investing about US$320 million in all; ABA was the third-largest bank in the country then and now ranks as Cambodia’s largest commercial bank by assets, deposits, loans, and profitability. A caution about Cambodia, here, is a caution about ABA.
The public record supports a material exposure that runs in both directions, not a confirmed stress event at the parent. ABA is large enough to sit inside the risk language a major bank uses with analysts, and large enough that its results move that bank’s international earnings. In the week the caution circulated, both ABA’s own 2025 figures and the parent’s quarterly filing showed growth rather than strain.
National Bank reported net income of C$1.23 billion for the quarter, up 38 percent against a year-earlier quarter depressed by an acquisition charge; on an adjusted basis, net income rose 12 percent, roughly the growth analysts had expected. Its Common Equity Tier 1 ratio stood at 13.5 percent. The U.S. Specialty Finance and International segment, the unit where ABA is consolidated, posted net income of C$186 million, up 10 percent, on revenue of C$410 million the bank attributed to revenue growth at ABA. Provisions for credit losses in the segment fell by C$15 million, which the bank attributed to its Credigy and ABA subsidiaries together. Personal lending in its core Canadian business grew 11 percent, and the board raised the quarterly dividend by eight cents to C$1.32 a share. That segment figure is not an ABA figure. It folds ABA in with the U.S. consumer-finance arm Credigy, and the filing does not separate the two.
ABA’s 2025 results put total assets at US$16.2 billion, up 17 percent, with a profit of US$377.5 million. Founded in 1996, the bank now runs more than 100 branches and serves over four million customers. It said it was managing a non-performing-loan ratio of roughly 7 percent, and that the Cambodia-Thailand border conflict had caused only temporary branch closures, without moving deposits or customer confidence. Set against National Bank’s roughly C$618 billion consolidated balance sheet, ABA is large in Cambodia and modest in Montreal, which is why the caution reaches segment earnings rather than group capital.
The sector figure is where the caution finds its firmest ground. Cambodia’s banking-system non-performing-loan ratio reached 7.9 percent at the end of 2024, the World Bank reported, up from 1.8 percent in 2019. Official reporting does not settle on a single number. The central bank’s 2024 financial stability review put the commercial-banking ratio at 7.2 percent, the gap to the World Bank figure turning on the treatment of loan-loss provisions. That review also recorded capital and liquidity well above requirement, the capital adequacy ratio at 22.3 percent and the liquidity coverage ratio at 199.4 percent, the non-performing-loan ratio net of provisions at 2.9 percent, and deposits growing about 16 percent on the year while total banking assets rose 6.6 percent, even as it found asset quality had declined further.
The World Bank named a measurement gap the headline ratio hides. A central-bank regulation issued in August 2024 let banks restructure a loan twice without reclassifying it, and by early 2025 about a tenth of all loans had been restructured, so reported non-performing loans understate the distressed total. That forbearance window closed at the end of December 2025, the point past which the World Bank expected reported figures to rise. ABA’s own reported ratio sits under the same regime, so its roughly 7 percent carries the caveat the sector’s does. Credit growth across the system had already slowed to about 3 percent in 2024, the World Bank and the central bank both recorded, the backdrop against which the bad-loan ratio climbed.
The path Lee described, from energy prices through a fuel-importing economy to weaker credit and slower loan growth, is a projection rather than a measured effect. The segment that drew his caution reported loan-driven revenue growth and lower provisions for the quarter instead. The same wire recorded that the Canadian banks hold no significant Middle East operations of their own, and no public ABA or sector data ties 2025 fuel costs to ABA’s loan performance. Mekong Strategic Capital, a Phnom Penh advisory, has projected that Cambodia’s 2026 growth could fall toward 2 percent under a sustained fuel shock, the low end of a range that ran near 5 percent in projections made before the conflict.
Neither institution’s disclosure addressed the caution directly. The note preceded the results by days, and both National Bank’s filing and ABA’s results statement spoke to their own numbers rather than to the risk Lee had raised.
The exposure is real and it runs both ways. ABA’s scale lifts National Bank’s international earnings, and that same scale writes Cambodia into the bank’s risk vocabulary. What the filings do not yet show is the strain the caution anticipates. A forecast about a fuel-importing economy is not the same as a number on a balance sheet, and on 27 May the numbers grew.
Sourcing note: This piece rests on public company filings, published analyst commentary, and official central-bank and multilateral data available as of 31 May 2026. None of the named parties was asked to comment; each is characterized only by its own public disclosures.