Maybank to help Myanmar firms raise regional capital

Maybank will offer a number of services in Myanmar including project finance and corporate lending, said Pollie Sim, CEO of international business at the Malaysian bank.

It will also be willing to help companies raise capital through regional equity or debt markets, she said at the launch of the bank’s Myanmar branch office on October 2 in Yangon.

Only one Myanmar company – Yoma Strategic – has succeeded in raising funds through an international capital market, listing on the Singapore Exchange in 2006 through a reverse takeover.

“We are well positioned to bring our experience to the table to develop project financing structures, or help raise capital via regional equity or debt markets,” said Ms Sim.

US sanctions on a number of the largest businesses in Myanmar will slow the process of taking local firms offshore to raise international capital.

The country’s first bourse, the Yangon Stock Exchange, is also scheduled to open in December, and commentators say authorities are likely to encourage domestic firms to list domestically rather than overseas.

In terms of bonds, the unrated sovereign has yet to issue an international benchmark, making it hard for local corporates to come to the market.

Maybank is the first Malaysian bank to open a branch in Myanmar, though it opened a representative office in the country more than two decades ago.

Now that it is permitted to do business in Myanmar for the first time, it will focus on financing priority areas for growth, including power, utilities, oil and gas, and telecommunications sectors, said Ms Sim. It currently provides financing for Yangon International Airport – developed by Myanmar conglomerate Asia World – as well as gas pipelines, sea ports and other infrastructure construction projects, she said.

“We will be able to leverage our balance sheet and offshore financing capabilities to finance large-scale projects and distribute them across our network.”

As well as capital market solutions, Maybank will offer treasury and cash management services, deposit accounts, transaction banking and working capital financing.

It hopes to gain up to 3 million customers in Myanmar in the coming years, and believes lending and transaction banking will be among the main revenue drivers in the next five years, said Ms Sim.

Maybank can also offer trade financing services, due to client connections in Myanmar’s trading partner countries such as China, India and ASEAN, said Soon Su Long, chief operating officer for Indochina.

“Maybank has a higher credit standing than local banks, and can offer guarantees for trade finance instruments that will be accepted by Myanmar’s trading partners,” he said.

Trade finance instruments such as letters of credit from Myanmar’s banks may not be accepted by international banks without some form of credit enhancement.

Maybank has a correspondent relationship with around 14 domestic banks, but has yet to sign any exclusive agreements.

The Malaysian bank was one of nine foreign banks to win a conditional licence to operate in Myanmar in a tender last year. They have been required to pay a minimum capital requirement of US$75 million, and are initially limited to running a single branch, and lending to international corporate clients and local banks.

All have now opened their branches ahead of the October 1 deadline, having secured final approval from the Central Bank of Myanmar.

The winning banks were: Australia’s ANZ Bank; Thailand’s Bangkok Bank; Japan’s Mizuho Bank, The Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corporation; China’s Industrial and Commercial Bank of China (ICBC); Malaysia’s Maybank and Singapore’s Oversea-Chinese Corporation (OCBC) and United Overseas Bank (UOB).

Maybank is the only bank in the world with branch offices in all 10 ASEAN member states. It also claims to be the region’s fourth largest bank by assets, with total assets of 640 billion ringgit ($145 billion) in 2014.

Source: Myanmar Times

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