OCBC builds anew with 60 years’ history

Singapore’s OCBC Bank has 60 years of experience banking in Myanmar as it looks to build its presence following its licence win last month.

Tan Chor Sen, OCBC’s international head, said having a Myanmar branch is important as the country is the next up-and-coming destination for business in the region.

“We are possibly the only foreign bank that is coming back to Myanmar to re-establish a branch presence in Myanmar,” he said in a telephone interview on November 3.

A forerunner of OCBC first established a Yangon branch in 1923. OCBC itself was born out of three banks on the Malayan peninsula during the Great Depression, and had a presence in Myanmar until the 1963 bank nationalisations, including founding a second Myanmar branch in Lashio, Shan State in 1939 to tap trade with China.

It re-opened in Myanmar with a representative office in 1994, and was one of nine successful applicants for a foreign banking licence on October 1.

Following its licence win, the bank is looking to assist with bringing in foreign direct investment, but also working with local financial institutions.

“So it’s an extension of activities supporting our customers to invest in potentially a highly attractive, high growth country,” he said.

OCBC has already supported loans to local business in the last two years.

Mr Tan highlighted an S$22 million (US$17 million) loan to Sian Mian Pte, the Singapore-registered affiliate procurement arm of Shwe Taung Group, to purchase 100 SCANIA buses for intra-country use, as well as its participation with four other foreign banks to arrange US$85 million in financing to telecoms tower company Pan Asia Majestic Eagle.

Foreign banks will have restricted licences at first, for instance limiting them to one branch and preventing them from retail banking.

Mr Tan said these restrictions will likely be gradually eased, as confidence grows in the services the foreign banks can bring to the market.

Still, the initial charter of the bank licence is quite clear, said Mr Ton.

OCBC must support the inflow of foreign investment. Its foreign clients are particularly keen on areas such as infrastructure, manufacturing and resource development. The bank must help the development of the domestic financial sector.

Some local bankers have also been vocal in their opposition to foreign banks entering Myanmar, claiming it creates a situation where important financial decisions are not always made with Myanmar’s best interests in mind.

Mr Tan said OCBC has a good relationship with local banks, built on years of collaboration and training. However, doing business in Myanmar presents its own challenges.

“We have a good track record in the country,” he said. “It is still a frontier market, it is still an emerging market, and so, one would expect policy adjustment to match the different challenges that they face opening up to different players. But all in, we don’t expect too many surprises.

“Historically we have had strong links to the country. With the right framework, the right systems, we would like to be a key contributor to Myanmar.”


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