OCBC Bank has taken a key step forward into the large untapped Myanmar market with its Yangon branch commencing operations yesterday.
It is one of the first three foreign banks to have won final regulatory approval from the Central Bank of Myanmar, along with Sumitomo Mitsui Banking Corp and Bank of Tokyo-Mitsubishi.
Sumitomo Mitsui opened its doors yesterday as well, while Bank of Tokyo-Mitsubishi began operations on Wednesday.
OCBC’s new branch in Union Financial Centre – two modern eight-storey office buildings in downtown Yangon – will offer banking services to foreign companies and joint ventures, as well as domestic banks in the country.
Its services include cash management, project financing and working capital financing.
Customers can open current and savings accounts denominated in Myanmar kyat, United States dollars and Singdollars, take out loans and apply for trade and foreign exchange facilities.
“The focus now is still very much on foreign companies, particularly on the association with foreign direct investments and (building) capability into the country to support the growth of the economy and its infrastructure across many fronts,” said OCBC head of global commercial banking Linus Goh on Wednesday.
He said that over time, the corporate licence will also be extended to allow the bank to offer services to local businesses directly.
Mr Goh said the success of Myanmar’s financial sector depends on “strong local banks”.
“Our role is not to overwhelm the domestic banks, but to allow them to move in tandem with us, so that together, we are a stronger financial sector.”
The top private banks in Myanmar include Kanbawza Bank, Ayeyarwady Bank and CB Bank.
Mr Goh said OCBC expects to double its revenue from its regional business involving small and medium-sized enterprises and mid-cap customers within three years. Already, its regional business had seen revenue double from 2012 to last year.
“Myanmar is quite a significant part of our regional business,” said Mr Goh, adding that market opportunities in the country continue to grow significantly.
The bank said in a statement yesterday that 10 accounts were opened at its Yangon branch shortly after it opened for business.
OCBC has had a presence in Myanmar for 60 years in all. It first operated a branch there for 40 years from 1923 to 1963, before returning to set up a representative office in 1994.
The new branch has registered capital of US$75 million (S$101 million), and is staffed by over 20 employees, of whom more than half are Myanmar people.
In October last year, a total of nine banks from Singapore – including United Overseas Bank (UOB) – Malaysia, Thailand, China, Japan and Australia were awarded provisional banking licences. UOB is waiting for regulatory approval to open a full branch in the country.
Source: Asia One