Shinhan Bank, South Korea’s fourth-largest bank by assets, has set up a branch in Myanmar as part of its diversification strategy.
The bank said it won final approval to start operations in Yangon from the Central Bank of Myanmar on September 15.
This marks the first time for a South Korean lender to set up a branch in the Southeast Asian country.
The latest opening of a branch has raised the number of the bank’s global financial network to 147 in 20 countries including Philippine, Singapore, Vietnam, Cambodia and Indonesia.
Shinhan Bank said its branch could help South Korean companies enter the Myanmar markets as it will offer them such services as money remittance in dollars and trade settlements, as well as loans in dollars.
Shinhan Bank set up its representative office in Myanmar in 2013 to extend its presence into the market. In March, it won a preliminary licence needed to open a branch.
However, foreign banks in Myanmar have very limited scope in terms of what services they can provide. For example, they are not allowed to carry out retail banking, which can essentially wipe out Myanmar’s tiny local banks.
“The branch allows Shinhan Bank to provide various services including overseas remittance in dollars, trade settlements, loans in dollars, and establishment of accounts in local currency, which have caused inconvenience for Korean companies,” an official at Shinhan Bank said, adding, “Economic exchange including mutual trading between two countries as well as Korean firms’ inroads into the Myanmar market is expected to be more vigorous.”
Launch of microloan business
Earlier, Shinhan Card Co, an affiliate of Shinhan financial group, launched microcredit service in Myanmar as part of efforts to explore new revenue sources in overseas markets amid dwindling profitability in the local credit market due to falling commission fees.
Shinhan Card said it began operation of Shinhan Microfinance in Yangon. The Korean credit card operator established the local entity Shinhan Microfinance in Myanmar in March and obtained business licence from the country’s financial authorities in July. The new business in the Southeast Asian country will offer small-sized loans to clients in Yangon and Bago.
Shinhan Microfinance also plans to provide instalment financing and leasing in small amount after it gains a foothold in the country’s microcredit market.
Source: Myanmar Business Today
