Major commercial banks are poised to
actively make inroads into Myanmar as the country is starting to
implement an open-door policy toward international activity.
Following Woori Bank and Hana Bank,
which opened liaison offices in the Southeast Asian country last month,
Shinhan Bank plans to join the movement as early as the first half of
next year.
The state-run Industrial Bank of Korea
is also preparing to tap the new market in a bid to overcome the
saturated market conditions at home.
After building relations with the
Myanmar government through liaison offices, the Korean banks are
expected to open branches or local subsidiaries when the ban on
non-Myanmar banks’ business activities is lifted.
A Shinhan Bank spokesman said one issue
is whether to form a joint venture with a local bank or to establish a
wholly owned corporation.
Woori Bank is expected to register its
Yangon office as either a branch or a local subsidiary by early 2014 and
expand its network of branches in the country.
Hana Bank has signed a strategic partnership with Ayeyarwady Bank, Myanmar’s third-largest bank in terms of total asset.
Korea’s major commercial banks have been
expanding their business networks in Asia’s emerging markets over the
past few years on the back of enhanced diplomatic ties.
In October, Korea and Myanmar agreed to
bolster business and diplomatic ties as Seoul looks to firm up its
footing in the Southeast Asian country following sweeping democratic and
economic reforms.
They agreed to push for an investment protection pact and boost cooperation on trade, energy, resources and infrastructure.
The two countries established diplomatic
relations in 1975. The relationship soured in 1983 when a terrorist
bombing in Yangon by North Korean agents killed 17 Seoul officials
accompanying then-President Chun Doo-hwan. Myanmar severed ties with
Pyongyang after the incident.
Korean banks’ targets include countries in central and southern Asia as well as those in Southeast Asia, China and Japan.
“Aside from markets like China, Vietnam
and Singapore, the banking industry began actively tapping Kazakhstan,
India and Bangladesh,” a local banker said.
But he stressed that banks will still put priority on making inroads into large cities in China and Southeast countries.
“With the 2008-2009 global financial
crisis fading, local banks have been rushing abroad to get the upper
hand in emerging markets,” a banking analyst said.
He said their aggressive expansion overseas was attributable to limited profitability in the saturated local banking industry.
source: Eleven Myanmar
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