OCBC, UOB and 7 others get Myanmar banking permits
They have to comply with central bank requirements before obtaining final licence
OCBC Bank and United Overseas Bank (UOB) have been granted a foreign bank licence to operate in Myanmar.
They are among the nine foreign banks that received preliminary approval on Wednesday from the Central Bank of Myanmar to prepare for the start of banking operations there.
The others are: Australia and New Zealand Banking Group, Bangkok Bank, Industrial and Commercial Bank of China, Malayan Banking Berhad, and Japan's three largest banks - Bank of Tokyo-Mitsubishi UFJ, Mizuho Bank and Sumitomo Mitsui Banking Corporation.
Every licence allows each bank up to 12 months to prepare for the opening of one branch in Yangon. The banks have to comply with requirements set by the central bank, among other things, before the central bank grants the final licence.
Under this preliminary licence, the banks will be allowed to offer wholesale banking products and services to foreign companies and joint ventures as well as domestic banks in Myanmar, including working capital financing and trade finance.
The banks can only lend to foreign investors in foreign currencies and not the local kyat, unless they partner a local bank.
Linus Goh, OCBC Bank's head of global commercial banking, said that since Myanmar opened up its economy in 2011, there has been "a steady increase in foreign interest across several key sectors of the economy", including real estate, commodities and telecommunications.
He added that foreign companies in Myanmar will be supported by an experienced team of commercial bankers, given that OCBC has had a presence in the country for 60 years.
Wee Ee Cheong, UOB's group deputy chairman and chief executive, said the licence will allow the bank to participate in Myanmar's economic development by deepening its onshore banking relationships.
Maybank, the fourth largest bank by assets in Asean, is the only Malaysian bank to have been awarded the licence. Its group president and CEO Abdul Farid Alias said he hopes to facilitate "greater cross-border trade" between Myanmar and the bank's core markets, as well as the Greater Mekong sub-region, particularly in Yunnan, as the bank opens its third China branch in Kunming.
In a statement, Bank of Tokyo-Mitsubishi UFJ said the opening of its branch in Myanmar is subject to approval from the Financial Services Agency of Japan. It added that it will prepare for the opening of its branch as soon as possible.
The Business Times understands that DBS Bank was among the 25 foreign banks that qualified for the final selection round but did not win a licence.
A DBS spokesman said the bank, which has been present in Yangon since 1993, "remains keen to tap on banking opportunities there" as Myanmar develops its financial sector.
The nine lenders are among foreign companies seeking to gain a foothold in Myanmar, which is opening up following 50 years of military rule.
