NBC H1 2026 — Banking Resilience Tested as Property NPLs Climb to 9.6%

This is the third in a series of articles examining banking-sector pressure points relevant to property buyers. It follows our analysis of AMRO’s record-low dollar liquidity warning and the IMF’s end-of-forbearance signal — and should be read alongside them.

The National Bank of Cambodia released its first-half 2026 banking sector report on July 27, presenting what Governor Chea Serey described as a “resilient” system navigating “high economic and financial uncertainties from both external and domestic factors.” The headline numbers are modestly positive — credit growing, deposits stable, capital and liquidity above regulatory minima. But beneath the surface, the data reveals a banking sector under accumulating pressure, with non-performing loans hitting their highest level in years, a large stock of restructured credit still working through the system, and the property sector explicitly flagged as a slow-recovery area.

For anyone buying, financing, or holding property in Cambodia, the NBC H1 2026 report contains signals worth reading carefully — not because the system is in crisis, but because the conditions that determine whether a developer delivers, a project maintains finance, or a buyer can transact are becoming more visible, and less forgiving.

The headline numbers

Outstanding loans across Cambodia’s banking sector reached 256.7 trillion riel ($64.2 billion) as of June 2026, up 4.6% year-on-year. Customer deposits rose at a similar pace — 4.4% to 257.4 trillion riel ($64.4 billion) — meaning the sector-wide loan-to-deposit ratio held roughly steady at near parity. Asset growth tracked in the same range.

Governor Serey, speaking at the NBC’s July 27 review meeting, credited the banking system with supporting key domestic sectors — goods production and services, agriculture and fisheries, and small and medium enterprises — by “providing loans at reasonable interest rates for business establishment and development.” She reiterated that price and financial stability remain the central bank’s top priority.

These headline figures are consistent with a system that is still growing, but at a pace that has decelerated from the double-digit credit expansion of earlier years. The 4.6% loan growth rate continues a multi-year deceleration: from roughly 20%+ annual growth in the pre-COVID years, to single digits in 2024 and 2025. Cambodia’s banking sector is not contracting — but it has shifted from a growth story to a stability story.

The NPL rise: 9.6% and what it means

The most significant number in the report is the gross non-performing loan (NPL) ratio: 9.6% as of June 2026, up from 8.4% across 2025 — an increase of roughly 1.2 percentage points in six months.

To put this in perspective:

• In 2019, Cambodia’s NPL ratio was roughly 2-3% — a level consistent with a fast-growing, low-default market.
• By 2023-2024, post-COVID forbearance and the real estate slowdown had pushed it to around 5-6%.
• The 2025 year-end figure of 8.4% was already elevated by regional and global standards.
• The June 2026 figure of 9.6% is now among the highest in Southeast Asia.

The NBC’s response is to point to provisioning coverage: net NPLs — the ratio after subtracting provisions — stood at just 3.3%, indicating that banks have set aside sufficient capital to absorb losses on their bad loans. This is a standard regulator’s argument, and it is not wrong on the accounting level. But it is important to understand what provisioning does and does not mean for the real economy:

Provisioning absorbs past losses, not future ones. The 3.3% net NPL ratio tells you the system has recognised and reserved against the bad loans it already knows about. It does not tell you whether new loans are turning bad, or whether the stock of restructured credit — $4.8 billion, or 7.5% of the total loan portfolio — will eventually require additional provisions.

Provisioning is a capital buffer, not a liquidity buffer. Even fully provisioned, a bank with a high gross NPL ratio has less free capital to lend. This is the transmission mechanism that matters for property: as NPLs climb, banks become more cautious about extending new credit, particularly to sectors already flagged as slow-recovery areas — like construction and real estate.

Restructured loans: the $4.8 billion question

The report discloses that 239,546 accounts with a total loan value of $4.8 billion have been restructured — representing 7.5% of the total loan portfolio. The NBC states that these restructuring measures are “being normalised to strengthen the system’s resilience.”

This is the largest restructured-loan stock Cambodia has disclosed in recent history, and it is the direct aftermath of the regulatory forbearance that the IMF flagged in its July 2026 Article IV mission — the subject of our companion article on the end of bank forbearance.

What matters here for property buyers:

Restructuring ≠ forgiveness. A restructured loan is a loan whose terms have been modified — typically an extended tenor, reduced payment, or interest-only period. The borrower still owes the principal, and the bank’s cash flow from interest payments has been deferred or reduced. This creates a multi-year drag on bank earnings, which in turn reduces the bank’s capacity and appetite for new lending.

The normalisation is the risk. The NBC’s reference to “normalising” restructuring measures implies that banks are gradually moving restructured loans back onto standard terms — meaning borrowers who cannot service the original terms will start to default, adding to the NPL stock. The pace and timing of this normalisation will determine whether the NPL ratio stabilises or continues to climb.

Construction and real estate loans are disproportionately represented. The report explicitly lists “the slow recovery of the construction and real estate sectors” as a continuing challenge alongside NPLs, climate change risks, and cybersecurity/technology fraud. This is the central bank itself acknowledging that property-linked loans are a material part of the stress.

Update, 25 August 2026: the normalisation this section anticipated is now confirmed. A National Bank of Cambodia letter dated July 22 formally phased out the preferential loan-restructuring measures the central bank had maintained since 2017 for COVID-19, the Russia-Ukraine war, and the Cambodia-Thailand border conflicts. Existing beneficiaries are grandfathered — the roughly 200,000 customers and $4 billion in loans already restructured under the preferential scheme are not retroactively reclassified — but banks can no longer extend new preferential treatment going forward. Restructuring itself is not banned; it reverts to the ordinary five-tier classification (normal, special mention, substandard, doubtful, loss) with provisioning of 1%, 3%, 20%, 50% and 100% respectively, and any new restructuring must now reflect a borrower’s actual repayment capacity rather than blanket relief. One figure worth flagging rather than force-reconciling: the ~200,000 customers / $4 billion cited in the July 22 letter is close to, but not identical to, the 239,546 accounts / $4.8 billion this report disclosed for the full restructured-loan stock as of June 30. The most plausible explanation is that the letter’s figure covers only the preferential-scheme cohort specifically, while this report’s total captures the broader restructured-loan book — but the available reporting does not confirm that reconciliation directly, and the two numbers should be read as close but not verified as identical populations.

For property buyers and developers, this closes the loop on what this section called “the risk”: the forbearance cushion under the mortgage and borey loan book is now formally withdrawn for any new restructuring, mid-downturn. A developer or a mortgage holder whose loan needs modification going forward will be assessed and provisioned under the ordinary credit-risk framework, not the relief regime that has applied since 2017 — meaning financial distress becomes visible in the numbers faster than at any point in this platform’s banking-risk coverage so far.

Update, 2 September 2026: the NBC refuses to reopen the door, even at lenders’ own request. Banks and microfinance institutions asked the NBC to extend the special forbearance measures — the flexibility on loan classification and provisioning wound down by the July 22 letter above — through the end of 2026. The central bank said no. Several Japanese outlets (Nikkei Asia, Tokyo Tribune) reported on September 1 that the NBC declined the request, repeating the July letter’s rationale: further relief risks masking underlying credit problems, and transparency in asset quality is essential for resilient credit allocation [S-007]. Rath Sophoan, Chairman of the Association of Banks in Cambodia, told Nikkei Asia the request was only for a short-term extension to help the sector respond to current economic conditions — not unconditional permission to restructure loans freely — meant to give lenders more flexibility managing portfolios and more time for struggling borrowers [S-007].

The refusal lands alongside a fresh NPL data point: RFI Khmer reported the banking sector’s gross NPL ratio at 9.6% in H1 2026, up from 8.3% in 2025 [S-007] — consistent with, though not identical to, the 8.4% 2025 figure this article cites above from the NBC’s own report. Treat the 8.3%/8.4% gap as cross-outlet rounding noise on the same trend, not a correction.

Not everyone agrees with the NBC’s call, and the dissent is worth naming rather than smoothing over. Sam Seun, a policy analyst at the Royal Academy of Cambodia, argued the central bank should reconsider — pointing to an economy that has not fully returned to pre-pandemic levels, tourism arrivals he put at around 2 million, the online-scam industry’s reputational damage, shifting US tariff policy, and Thailand border tensions as reasons the timing is wrong [S-007]. That is an on-record view from a named, credentialed source, not this site’s own — but it confirms the forbearance-ending decision is contested, not a settled consensus even among people who agree NPLs are a real problem.

For property, the practical reading is now settled rather than pending: this closes off the one avenue lenders were actively pursuing to keep the relief window open. Whatever cushion the July 22 letter left in place is confirmed final — the NBC will not reopen it even under direct industry pressure, mid-downturn, with tourism and trade headwinds stacking up. Developers relying on bank-financed buyers, and mortgage holders who need a modification, should now assume the ordinary credit-risk framework applies in full, with no renewed relief window on the table. The grandfathered restructured-loan book — the roughly 200,000 customers and $4 billion under the preferential scheme — is the one to watch for write-downs surfacing faster than the market has priced in, now that normalisation has no fallback option left.

The property read-through

For property buyers and developers, the NBC H1 2026 report reinforces three themes that run through our recent banking-sector coverage:

1. Developer financing is getting tighter, not looser

A banking system with a 9.6% NPL ratio and $4.8 billion in restructured loans is not one that is aggressively expanding construction lending. The AMRO dollar-liquidity warning — which we reported on yesterday — showed that banks’ USD reserves at the NBC have fallen to a record low of 10.4% of deposits, with $10.5 billion shifted offshore. Combine that with rising domestic NPLs, and the picture is clear: the credit channel for project financing has tightened materially.

For a buyer evaluating an off-plan project, this means:

• Development timelines are more likely to slip. If a developer’s construction loan comes up for renewal under stricter terms, the project slows.
• Developer solvency is harder to verify. The rising NPL stock suggests that some developers who borrowed through the banking system are under pressure — but balance sheets are opaque, and a developer’s bank debt may not be publicly visible.
• Pre-sale deposit structures matter more. The stronger the developer’s own balance sheet (equity, retained earnings, existing completed projects), the less dependent they are on the fragile bank-lending channel.

2. Mortgage availability may tighten

Banks with elevated NPLs and a large restructuring book have less risk appetite for new retail lending — including mortgages. This is more likely to affect mid-range and less creditworthy borrowers first, but the effect can cascade: tighter mortgage availability depresses transaction volumes, which weakens price support, which affects developer cash flow, which increases banking-sector stress. This feedback loop is the classic property-cycle dynamic, and the NBC’s report confirms the ingredients are in place.

For buyers who need local financing, this reinforces the case for:

• A larger down payment (lower loan-to-value ratio improves the chance of approval).
• Engaging with multiple banks, not just one, and preferably before you have signed a purchase agreement.
• Independent legal advice on the mortgage contract, particularly on any cross-default provisions that link the mortgage to other liabilities.

3. Deposit security and bank selection matter more

The NPL rise — coming after the liquidation of Prince Bank, Panda Commercial Bank, and H-Pay — is a reminder that Cambodia’s banking sector is not monolithic. The systemic players — ACLEDA, Canadia, ABA — are well-capitalised and meet international standards. But NPL pressure is not distributed evenly across all banks, and the banks with weaker loan books could face liquidity or capital challenges as the restructuring normalisation progresses.

For a foreign buyer holding deposits in Cambodia:

• Use a large, well-capitalised bank for your primary account and for the funds destined for a purchase. ABA, ACLEDA, and Canadia are the three banks most commonly recommended by expat and professional investor sources, and they are also the ones with the deepest capital bases.
• Keep escrow arrangements legally separate. If a developer asks you to deposit into a bank account they control — even a dedicated project account — understand that this is not a true escrow arrangement in most cases. Your deposit is a credit owed by the developer, not ringfenced funds, and it is exposed to both the developer’s solvency and the bank’s health. Use a licensed independent conveyancer or law firm to hold deposit funds where possible.
• Monitor the bank, not just the project. If you are financing through a specific bank, it is worth checking whether that bank’s NPL ratio and capital adequacy are disclosed and current. The NBC publishes aggregate data; individual banks’ annual reports are the best available source for the granular picture.

Context within the series

This NBC H1 2026 report is the third regulatory signal in as many weeks that Cambodia’s banking sector — long considered a relative bright spot in the investment case — is under meaningful pressure:

Signal	Source	Date	Key Takeaway
IMF forbearance warning	IMF Article IV	Jul 2026	Regulatory forbearance masking asset quality is ending — more defaults to surface
AMRO dollar liquidity	AMRO	Jul 28, 2026	USD liquidity buffer fell to record 10.4%; $10.5B shifted offshore
NBC H1 2026 NPLs	NBC	Jul 27, 2026	Gross NPLs 9.6%, restructured loans $4.8B, construction/RE flagged
NBC refuses forbearance extension	Khmer Times / Nikkei Asia	Sep 1-2, 2026	NBC declines lenders’ request to extend relief through end-2026; ABC says request was short-term only

Each of these signals comes from a different source — the IMF (multilateral surveillance), AMRO (ASEAN+3 regional monitoring), and the NBC (domestic regulator) — but they all point in the same direction. The banking sector that supports Cambodia’s property market is under a degree of strain that is becoming harder to ignore.

Bottom line

The NBC H1 2026 report does not announce a banking crisis. Governor Serey’s characterisation of the system as “resilient” is defensible on the data: capital and liquidity remain above regulatory minima, provisioning coverage is adequate against the known NPL stock, and credit is still growing. But the trends are unmistakably deteriorating, and for property buyers the relevant question is not whether the system will collapse — it almost certainly will not — but whether the conditions that make a property investment work are being affected.

Tighter developer financing, potentially tighter mortgage availability, and a large stock of restructured credit that is still being normalised all point to the same conclusion: the margin for error in a Cambodian property purchase has narrowed. Buyers who do their own diligence on developer track records, use well-capitalised banks, and maintain clean documentation will be better positioned than those who assume the 2021-2024 environment of easy credit and rising prices still applies. It does not.

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Sources

Ref	Source	Title
S-001	Khmer Times (Jul 28, 2026)	NBC reports 4.6% credit growth for banking sector
S-002	National Bank of Cambodia	H1 2026 Banking Sector Report (presented Jul 27, 2026)
S-003	Research Cambodia (Jul 29, 2026)	AMRO Warns Cambodia Banks’ Dollar Liquidity at Record Low
S-004	Research Cambodia (Jul 27, 2026)	The IMF’s Other Warning: What the End of Bank “Forbearance” Means for Property Financing
S-005	Research Cambodia (Jul 25, 2026)	Prince, Panda, and H-Pay: What Three Linked Failures Reveal About Banking Risk
S-006	Khmer Times (Aug 24, 2026)	NBC ends preferential loan restructuring measures
S-007	Khmer Times (Sep 2, 2026)	NBC turns down lenders’ request to extend loan forbearance