ICBC, Japan’s Megabanks Win Myanmar Banking ApprovalSanat Vallikappen and Christopher Langner
Industrial & Commercial Bank of China Ltd. and Japan’s three largest banks won approval to start operations in Myanmar, the Southeast Asian nation emerging from five decades of economic isolation.
ICBC, Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc., Mizuho Financial Group Inc. and Australia & New Zealand Banking Group Ltd. were among nine banks that in received the preliminary approvals, Myanmar’s foreign bank licensing committee said in a statement today.
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 percent this year, faster than the 4.8 percent predicted for developing nations.
“Our focus is really going to be on serving foreign multinationals and assisting the local financial institutions locally in their activities,” Andrew Geczy, ANZ’s chief executive officer for international and institutional banking, said by phone from Melbourne today. “It’s clear that there is a significant opportunity for us.”
Bangkok Bank Pcl, Malayan Banking Bhd., Oversea-Chinese Banking Corp. and United Overseas Bank Ltd. also won preliminary licenses valid for 12 months.
During that period, the lenders will have to satisfy commitments they made in their requests for licenses, demonstrate functional banking operations and comply with other requirements from the Central Bank of Myanmar, the country’s foreign bank licensing committee said. If they are able to meet these criteria, the central bank will grant the final license.
Twenty-five foreign banks submitted proposals for licenses, according to ANZ’s Geczy. Rather than compete in retail banking, Myanmar’s regulators were looking more for companies that could engage in institutional banking and help bring foreign direct investment into the country, he said.
ANZ opened a representative office in Yangon last year, the bank said in an e-mailed statement today.
Myanmar signed a foreign investment bill in 2012 to woo more interest from overseas corporations. The same year, the U.S. started easing economic sanctions against the Southeast Asian nation after President Thein Sein began a democratic process that elected opposition leader Aung San Suu Kyi to parliament after 15 years of house arrest.
OCBC, which has had a representative office in Yangon, Myanmar’s largest city, 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 today.