OCBC to focus on seven key sectors

 Singapore’s Oversea-Chinese Banking Corporation (OCBC), one of the nine successful applicants for a licence to operate in Myanmar, will focus on lending to foreign companies in seven key sectors.

Linus Goh, its head of global commercial banking, told Myanmar Eleven in an exclusive interview that the bank would help foreign companies and their joint venture partners finance investment in infrastructure development; power and energy; commodities; telecommunications; oil and gas; hospitality; and real-estate development.

 “Across these sectors, there are plenty of investments required to make economic reform and growth … and all of that requires financing. We believe there is plenty of scope for banks to support companies from the region entering this new market,” Goh said.

 The bank is one of the two Singaporean lenders, along with United Overseas Bank, that received preliminary approval from the Central Bank to prepare for commencement of banking operations in Myanmar. The bank has up to 12 months to prepare for to open its new branch in Yangon.

 Goh said that the licence would enable the bank to contribute to Myanmar’s economic growth through financial services. He insisted that the bank would work together with its domestic banking partners to strengthen the foundation of the financial sector, by introducing new capabilities and innovative services to support its growth and transformation.

 “The licence effectively allows us to do two things. The first is to support foreign companies and joint ventures coming into Myanmar. Secondly, we will also continue our partnership with domestic banks in developing the financial sector. In this regard, we have had long relationships with local banks, particularly in the area of training and development,” Goh said.

For more than a decade, the bank has provided both structured and thematic training support for local banks. This includes facilitating structured field trips to different markets so that bank staff can observe the practices and the transformation of banking services in markets outside of Myanmar. In 2013, the bank tied up with the Myanmar Banks Association to conduct structured certification training for all banks, covering the topics of trade finance, treasury and risk management.

“With a branch, we will be able to do much more. Foreign companies will soon be able to open an OCBC bank account in Myanmar and be supported by an experienced team of commercial bankers based in Yangon to support their banking needs for their local projects and operations,” Goh said.

 The new branch would offer a full range of products and services, including cash management, project financing, working capital financing and trade finance, as well as treasury and capital markets advisory and services.

 “We recognise that international growth is very high on the agenda of our regional customers, and navigating the regulatory, financial and business nuances of different markets is one of many challenges of doing business overseas. So, we have built a regional capability to serve customers who are venturing abroad by delivering local market know-how and access, combined with a single relationship view across these markets,” he said.

 OCBC’s history in Myanmar dates back to 1923, when a branch was opened in Rangoon by the Oversea-Chinese Bank – one of three banks that merged to form OCBC Bank in 1932. With the opening of the Burma Road in 1939, linking the country to the southwest of China, OCBC established another branch in Lashio, to cater to growing trade with China. The bank was actively involved in international trade finance and foreign exchange activities in Myanmar until 1963. In 1994, OCBC returned to Yangon with a representative office on Pyay Road, which was then moved to the bank’s present premises in Sakura Tower in 1999.

During the interview, Goh expressed his satisfaction over the bank’s 60-year presence in Myanmar and the performance of its representative office in the last three years.

“Our rep office has been facilitating enquiries, investigation, research, as well as making contacts for many of our customers from the region, in particular our core markets of Singapore, Malaysia, Indonesia and Greater China. These include multinational companies that are looking at entering this market. We are typically seen as a resource for many of these companies, as we enable them to come in and to learn more about the market,” he said.

“We have had a good track record in the country. It is still a frontier market, it is still an emerging market, and so, one would expect policy adjustment to match with the different challenges that they face opening up to different players. But all in, we don’t expect too many surprises. The track record of the government in the past three years, and the interest levels from foreign investors has given us enough comfort that the way forward would be reasonably good.”

When asked to provide some suggestions for the development of the banking industry, Goh said the most pressing need was to upgrade the skills and know-how of the staff.

“For the financial industry, there is a continued focus on building capability. But as the economy grows, you have more requirements. You have the banks that have launched mobile services, SMS-based services. Now, they have got smart phones and mobile banking. They will probably leap-frog the normal evolution of banking systems or financial systems, simply because of the devices that people buy today,” said Goh.

“The businesses there obviously will have more requirements for financing, for imports and exports, and that’s where they are building up their capability, connecting to the rest of the world, to offer international payments and international trade financing.”