OCBC gets nod for Myanmar branch; UOB next in line

Singapore

OCBC on Thursday said that its branch in Myanmar will commence operations this month, after the bank received final regulatory approval from the Central Bank of Myanmar.

UOB told The Business Times that it expects final approval soon, too, and should open its first branch in Myanmar in the next few months.

"Our branch is ready for business and we are waiting for regulatory approval to open our doors," a spokeswoman told BT.

The branches, to be set up in Yangon, will provide services such as trade finance and cash management to regional and global companies that are keen to expand their operations in this burgeoning country.

UOB will provide foreign direct investment (FDI) advisory, having established nine dedicated FDI advisory units across the region to tap demand out of Asia. OCBC, meanwhile, will offer Internet banking facilities to corporate customers there. They will also provide services to the domestic banks in Myanmar.

UOB and OCBC were among the nine regional banks in October to be granted a preliminary foreign bank licence to operate one branch in Myanmar. DBS failed to clinch a licence. All three have representative offices in Yangon.

Others include Japan's three largest banks - Bank of Tokyo-Mitsubishi UFJ, Mizuho Bank and Sumitomo Mitsui Banking Corporation - ICBC, and Maybank.

Customers will be able to open current and savings accounts denominated in Myanmar kyat, US dollar and Singapore dollar, OCBC said. But there remain restrictions for international lenders: these banks can only lend to foreign investors in foreign currencies, unless they partner a domestic bank.

UOB separately cited data from a 2014 survey that showed one in four Asian enterprises plan to expand into Myanmar this year. A total of 1,024 Asian companies were polled.

The greatest optimism came out of Hong Kong, where one-third of businesses there said that they would expand into Myanmar this year. In Singapore, about 20 per cent of businesses here said that they would grow their presence in the country.

Likewise, OCBC said that it has seen a significant increase in queries from customers keen to head to Myanmar.

Last year, UOB provided lending to Singapore company Asiatech Energy for its combined-cycle gas-fired power plant project in Myanmar. OCBC was also involved in a loan facility for an independent telecommunications infrastructure provider in Myanmar.

OCBC joins Bank of Tokyo-Mitsubishi UFJ in receiving final approval. The third is said to be another Japanese bank, two sources told BT.