Myanmar's banking sector is set to expand beyond national borders for the first time with Thailand’s granting of a licence to Kanbawza (KBZ) Bank to open a representative office.
KBZ said in a statement on Monday that the licence marked “a major milestone for Myanmar’s largest private bank” as it became the first lender to establish a presence anywhere outside the country, the Myanmar Times reported on Tuesday.
The announcement was made as Foreign Minister Don Pramudwinai visited Nay Pyi Taw for talks with Myanmar Foreign Minister Aung San Suu Kyi and President Htin Kyaw.
“As the largest bank in Myanmar, we are able to use our extensive knowledge of the country’s financial markets to encourage and promote trade,” said KBZ senior managing director Than Cho.
The representative office, which will need further Thai approval before it can provide banking services, is to be headed by Zeyar Sein Htut, KBZ Bank’s newly appointed country head for Thailand. KBZ said the office would focus on market research, liaising with the private sector and serving as a source of information, including regulatory requirements for doing business in Thailand and Myanmar.
KBZ said Thailand is Myanmar’s second-largest trading partner after China, with trade totalling US$6.8 billion over the past five years.
KBZ Bank sees Myanmar’s estimated 3 million migrant workers in Thailand as potential customers. It said it would “explore opportunities” to build relations with and eventually cater to the migrants when they return to their home country.
However many of those migrants are working illegally in Thailand, lacking proper papers and living at the mercy of brokers and unscrupulous employers. When it comes to remittances they usually use informal and unregulated money transfer systems involving brokers.
Reporters at a news conference in Nay Pyi Taw on Monday pressed Thailand’s foreign minister on the difficulties facing migrant workers. Aung San Suu Kyi took the question and said Thailand was working on these issues.
KBZ Bank said it had also applied to open a representative office in Singapore and was “poised to continue expansion in Asean”.
Aung Ko Win, chair of the bank and founder of the KBZ group, was previously subject to EU and Australian sanctions for his close ties with the former military junta. He is now recognised for his transparency and as a leading taxpayer.