BBL has high hope for its branch in Myanmar
BANGKOK BANK hopes its Myanmar branch, the only one in the country held by a Thai bank, can become the third-largest by assets of its international network of 30 branches in 14 markets by 2020, by banking on the bright investment prospects in Myanmar.
The branch started offering banking services in June after receiving a foreign-bank licence, along with eight other banks, from Myanmar’s central bank last year.
In BBL’s international network, Hong Kong is the largest, followed by Indonesia and Singapore.
Myanmar is the latest addition to the network, but BBL president Chartsiri Sophonpanich believes it has a good chance of entering the top three.
Kobsak Pootrakul, executive vice president, said last week that the quick implementation of economic reforms over the past three years had led to renewed interest in Myanmar by the global investment community.
The country is a land of golden opportunity and it should be the last economic frontier for investors, he said. The growth of its gross domestic product is likely to reach 10 per cent soon, up from the average of 8 per cent projected by the International Monetary Fund.
Deeper trade integration, larger incoming foreign direct investment (FDI), a rise in foreign tourists and greater industrialisation, especially in the Thilawa Special Economic Zone, are accelerating GDP growth.
Industrial estates are encouraging all investors to key in on Myanmar.
Thilawa is the critical turning point for Myanmar because Japanese investors are pouring into this estate. Even while the country is heading for a general election, FDI is continuing, hitting US$8 billion (Bt285 billion) so far this year.
When investors predict their income growth in Myanmar, the actual result is higher, Kobsak said.
The rapid development is driving up personal income, expanding the middle and affluent classes and accelerating urbanisation.
GDP per capita in 2020 is expected to jump to $2,000, double the present figure. That will create huge purchasing power and a doubling of the middle class to 10 million within eight years, he said.
This opens up more opportunities to Thai businesses than just border trade, which will triple by 2020 from Bt100 billion now.
The bank has capitalised on the booming border trade by opening four branches in Mae Sot, Kobsak said.
Chartsiri said the bank’s customers in Myanmar consisted of local, Thai and overseas companies. Those in trading conduct many transactions while heavy industries require huge investment.
“When the bank understands the development of each business, we are able to provide financial solutions from this branch or our network abroad, including our branches in Thailand,” he said.
The import/export business is key for the bank in providing trade finance, while private investment will take a mid-to-long-term time frame to implement, just like in Thailand.
“Growth in Asean and Asia is increasing. Trading and investment in the region will expand a lot.
“The network in Asean and Asia of BBL is a key strength in helping customers to do business smoothly in each country where we have our network,” he said.
At first, the bank will focus on advisory services for investors rather than financing, because most investors have enough funds to start a business.
However, when those businesses develop, funding will be the next stage for BBL.
BBL’s branch in Myanmar has registered capital of $200 million, above the Myanmar central bank’s requirement of $75 million, as it wants to show full preparation in supporting business activities here.
The bank’s head office in Bangkok will set up an Asean Connect Desk by the end of this year to provide information on business opportunities and what investors should know if they want to do business in Myanmar and other countries in Asean.
The international market continues to contribute 18-20 per cent of the bank’s lending. It wants to keep that proportion as it moves forward, Chartsiri said.
