UOB helping clients invest in Myanmar

UNITED Overseas Bank Group (UOB) is ramping up its activities in Myanmar as companies invest in the country's economic transformation.

UOB said over the next 12 months, its clients will invest US$300 million in Myanmar in projects that will meet the country's growing urbanisation and industrialisation needs.

The clients include multinational and regional companies based in Europe and Asia, namely Hong Kong, Singapore and Thailand, UOB said on Tuesday.

The investments will mainly be in building factories, hotels and commercial properties. UOB will provide working capital and term loans for the various projects.

Ian Wong, UOB managing director, group strategy and international management, said the bank is keen to support long-term strategic investments into Myanmar that will contribute to the country's economic progress.

The bank will focus on three sectors: infrastructure, manufacturing and hospitality, he said.

"Since the opening up of Myanmar economy three years ago, we have been helping our clients identify investment opportunities in the country, many of which have turned into business plans on the ground," Mr Wong said.

Investments booked through Singapore make it the third-largest investor into Myanmar as at fiscal 2015, with investments totalling US$8.8 billion, data from the Myanmar government showed.

According to UOB's research, Myanmar will attract US$163 billion in foreign direct investment (FDI) over the next 15 years from companies keen to get involved in the country's economic transformation and liberalistion.

About 75 per cent of this FDI will go to the infrastructure sector, followed by manufacturing (13 per cent) and tourism (4 per cent), UOB said.

UOB forecasts that Myanmar's economy will grow at a compounded annual growth rate of 8 per cent per annum, taking its gross domestic product (GDP) from US$54 billion this year to US$176 billion in 2030. GDP per capita will more than triple, from US$1,999 to US$3,100, in the same period. Population is 50 million.

UOB's key footprint is in South-east Asia and "the last frontier is Myanmar", in terms of the scale of the country's economy and potential, said Mr Wong.

The bank is offering domestic and cross-border banking services through its Yangon branch, including corporate loans, trade financing, working capital loans and cash management solutions.

In addition to funding, UOB helps to connect its clients with strategic business partners and key government agencies in Myanmar through its FDI Advisory Unit, he said.

UOB was the first foreign bank to establish an FDI Advisory Unit in Myanmar in 2013 to help businesses identify and explore opportunities in the country. UOB has nine such dedicated units in Asia, which have helped more than 500 companies expand across the region.

UOB - one of nine foreign banks awarded banking licences in Myanmar last year - officially opens its Yangon branch on Thursday.

Although the branch began business in May, UOB has been engaging clients interested in Myanmar for the last couple of years.

Last year, UOB provided financing to US-based APR Energy which will build one of Myanmar's largest thermal power plants. It is also providing financing to Asiatech Energy, the first Singapore company to build a combined cycle gas-fired power plant in the Mon state to help serve the country's electrical needs.

In April this year, UOB clinched another financing deal with Singapore-based Royal GK Pte Ltd, an engineering procurement and construction company which has a contract to procure gas engines for the construction of a gas-fired electricity power plant in Hlawga, Yangon.

In May, UOB became the first foreign bank to offer an onshore loan in Myanmar.

The loan is to Rangoon Excelsior Company, a French-Myanmar joint-venture company, to finance the refurbishment of a former colonial building in downtown Yangon into a five-storey hotel.

Mr Wong said UOB's differentiator is its ability to help clients understand regulations as they evolved in Myanmar.

Harry Loh, UOB Myanmar country manager, said having the right on-the-ground support is important when expanding in the country.

"UOB has been in Myanmar for more than 20 years through a representative office. We have the network, connections and strong understanding of the local culture which can help our clients navigate the country's evolving regulatory and business landscape as they expand their business," said Mr Loh.

Overseas profit contribution made up 38.7 per cent of UOB's profit in 2014. It posted net profit of S$3.2 billion.

UOB has the biggest South-east Asian network among the three Singapore banks, with 484 branches and offices. Rivals OCBC Bank has 443 branches and offices while DBS has 135 branches and offices.