UOB on course to strengthen its foothold
Singapore-based United Overseas Bank (UOB) has been advising more than 50 clients since it established an office in Myanmar last year, according to the bank.
The UOB opened a consultancy office in Myanmar in 2013 to advise existing and potential clients on investing in Myanmar.
It is one of the leading banks in Asia and has more than 500 offices in 19 countries around the world.
The two key factors behind Asian businesses' keen interest in Myanmar are the country's expanding middle class and the swift economic reforms taking place, according to the UOB.
UOB is one of foreign banks which are awaiting the banking licenCes to operate in the country – now a new destination for companies across the world thanks to the cheap labour cost and abundant resources.
The bank has been expanding its presence in Asia in the past few years.
It announced in February that the cross-border corporate loans have doubled since 2011, thanks to corporate expansion in Asia. Companies in the construction, manufacturing and commodity and resource trading industries make up the majority of customers for which UOB has been providing cross-border corporate loans and other financial assistance over the period.
In 2013, China was the top destination for FDI in the region at US$127 billion, followed closely by Southeast Asia at US$116 billion
In a statement released last month, Sam Cheong, executive director and Head of Group Foreign Direct Investment Advisory Unit, UOB Group, said he was seeing more companies expressing serious interest in Myanmar.
A survey conducted by the bank in October 2013 showed that of 800 businesses in Asia found, one in two companies (51 per cent) with a turnover of between US$10 million and US$160 million see Myanmar as an expansion opportunity. Their preferred strategy is to establish a local presence (14 per cent) followed by partnering with local agents and businesses.
“Myanmar’s economic transformation has undoubtedly led to strong interest by both global and Asian enterprises in investing into the country. In fact, it is now a hot spot in Asia for investment and expansion plans. Its favourable geographical position and large population of 60 million, make it suitable for businesses looking to take advantage of trade flows and to build new customer bases,” said Cheong.
One such customer is US-based APR Energy, a global leader in power solutions, who partnered with UOB to help it achieve its expansion into Myanmar. APR Energy recently won a large-scale turnkey power contract in Myanmar to provide power to more than six million people. It will build one of the largest thermal plants in the country. The APR Energy contract was the first power generation agreement signed by a US-based company with the government of Myanmar since the lifting of sanctions in 2013.
“UOB is a key partnership bank in Asia. Through leveraging UOB's strong regional franchise in Asia , we have obtained tremendous support from UOB’s teams in respect to our recent landmark Myanmar contract. We look forward to working with UOB to support our Asian expansion plans,” said Clive Turton, Head of Business Development across Asia Pacific at APR Energy.
To strengthen its business footprint, the Singaporean bank is introducing a 10 billion Singapore dollar medium-term notes programme.
