Myanmar on the hunt for foreign investors

SINGAPORE: Myanmar’s regulators, in granting bank licences to nine foreign lenders, sought companies that could lure investment to a nation emerging from five decades of economic isolation.

The 25 banks that applied for licences were expected to engage in institutional banking to facilitate the entry of foreign investors, said Andrew Geczy, Australia & New Zealand Banking Group Ltd’s chief executive officer for international and institutional banking.

ANZ was among the banks that won approval, along with Industrial & Commercial Bank of China Ltd.

The lenders are among foreign companies seeking to gain a foothold in Myanmar as the nation reconnects with the global economy following 50 years of military rule.

Myanmar’s economy is projected by the World Bank to grow 7.8% this year, faster than the 4.8% predicted for developing nations.

“Our focus is really going to be on serving foreign multinationals and assisting the local financial institutions in their activities,” Geczy said in an interview from Melbourne.

“The banking regulator did not really want to have a group that was competing on retail banking.”

ANZ opened a representative office in Yangon, Myanmar’s largest city, last year as it expands in emerging nations that are growing faster than its home market.

Australia’s third-largest lender is close to lending in Thailand and plans to expand in India, Farhan Faruqui, head of ANZ’s international- banking unit, said in a Sept 17 interview.

Mitsubishi UFJ Financial Group Inc, Sumitomo Mitsui Financial Group Inc, Mizuho Financial Group Inc, Bangkok Bank Pcl, Malayan Banking Bhd, Oversea-Chinese Banking Corp and United Overseas Bank Ltd also won preliminary licences valid for 12 months in Myanmar.

During that period, the lenders will have to satisfy commitments they made in their requests for licences, demonstrate functional banking operations and comply with other requirements from the Central Bank of Myanmar, the country’s foreign bank licensing committee said in a statement.

If they are able to meet these criteria, the central bank will grant the final licence.

The selection committee had chosen foreign banks that “can support market development in Myanmar,” central bank of Myanmar chairman Kyaw Kyaw Maung told reporters in Naypyidaw, the country’s capital.

OCBC, which has had a representative office in Yangon for the past 20 years, will offer services from cash management, project financing and trade finance to treasury and capital markets advisory to clients, the Singapore-based bank said in a statement. – Bloomberg