Thursday, August 17, 2017

UOB receives nod to open Yangon branch

Singapore-based United Overseas Bank Group (UOB) has been granted a licence to begin operating in Myanmar from today, according to the Central Bank of Myanmar.

The bank will be the fourth of nine foreign banks to open their branches, after winning a highly-competitive licensing contest last year.

“The bank has undergone a stringent entry process as defined by the Central Bank of Myanmar in November 2014,” the Central Bank said in a press release. It added the bank has met all the necessary requirements before receiving the licence.

Some 25 banks officially signalled their interest in a licence by submitting applications by a July 2014 deadline. A total of nine were declared as winners on October 1, 2014. The nine have a year to meet the licence requirements and open their branches.

While the foreign banks will face a number of restrictions, such as being limited to one branch and being barred from retail banking, their entrance has been criticised by some local bankers, who say they may be too much competition, too soon.

Others say the introduction of foreign banks will help to build the financial sector and improve access to finance for businesses in Myanmar.

UOB said in a press release it aims to offers clients with regional ambitions a stronger Southeast Asia network with the addition of the Yangon branch on May 4. UOB has had a representative office in Yangon since 1994, though representative offices are restricted from most business.

The branch aims to offer international clients access to onshore and cross-border banking services to help investments and expansions supporting Myanmar’s economic growth.

“Myanmar, with its huge population and abundant natural resources, is proving to be an attractive destination for our corporate clients from around the world,” said Ian Wong, managing director of UOB group strategy and international management, in the release.

UOB Myanmar country manager Harry Loh said the firm has already provided offshore financing and on-the-ground support to regional clients expanding to Myanmar.

“We have a strong pipeline of foreign direct investment from across our network set to flow into Myanmar now that we have received final approval from the Central Bank of Myanmar to offer onshore banking solutions to foreign enterprises and joint ventures,” he said.