TOKYO: Japan’s two top banks are set to open branches in Myanmar this week, becoming the first foreign banks to set up shop in the country: a place viewed by many as one of the “last frontiers.”
Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corp. will open branches on Wednesday and Thursday in the center of Myanmar’s capital Yangon. Singapore’s Oversea-Chinese Banking Corp., which was also granted approval to open a branch, will start operations Thursday.
Last October, Myanmar awarded banking licenses to nine foreign banks including Mizuho Bank, Australia & New Zealand Banking. and Industrial & Commercial Bank of China.
For Japan’s top three lenders to each be granted banking licenses in the third world country is a big score for the Japanese government, which has been making great efforts to beef up its presence in Southeast Asia.
Since taking office in late 2012, Prime Minister Shinzo Abe has repeatedly traveled to the region, accompanied by large delegations of corporate executives. Japan’s financial regulators and top bankers have also made frequent trips to Myanmar over the past few years.
“We are confident that our bank can help transform Myanmar’s financial sector into one that is well-developed, and can effectively spur and drive sustainable economic growth,” Go Watanabe, the chief executive officer for BTMU’s Asia & Oceania said at opening ceremony for his bank’s branch in Yangon’s business district.The Tokyo lender hopes to increase loans to Japanese and other foreign companies looking to do business in Myanmar.
Meanwhile, SMBC will open a branch Thursday in Pabedan Township in the center of downtown Yangon. The lender said it hopes to ramp up its transaction business and lending in foreign currencies. It can also provide online local currency money transfers through its local partner Kanbawza Bank, a bank spokesman said.
For Japanese companies, Myanmar is becoming a key area as the country has been controlled by military regimes and cut off from many things because of sanctions from western nations.Companies such as Hitachi Ltd. and Marubeni Corp. have announced plans to expand their presence there as they see many investment opportunities in the country, which suffers from poor infrastructure.
For foreign banks, business is still limited as they are not allowed to operate a retail-banking business and are not permitted to lend money to local companies.
