Asiamoney Best Bank Awards 2017: Myanmar
Best domestic bank: KBZ
KBZ Bank’s competitors like to describe it as a ‘protected species’ in Myanmar banking. They may be right – KBZ’s connections are very tight in the capital Nyapyidaw. It has ties to still powerful members of the former military junta that ran Myanmar for decades.
But such remarks also betray a deep envy among KBZ’s rivals, covetous of its dominant share of the country’s emerging financial scene. Protected or otherwise, few banks dominate their home market like KBZ. In the evolving modernization that is Myanmar banking, there’s KBZ at the top and daylight to its competitors.
The superlatives speak for themselves. KBZ has opened 447 branches nationally, 85 more than last year, and now boasts a branch network more than double its closest competitor to reach all corners of a very vast and undeveloped country. Similarly, its 833-strong ATM network is bigger than its next two competitors’ networks combined. KBZ has 2.4 million account holders and opened 300,000 more in the last year as its inclusion efforts brought more Burmese into the market.
KBZ predicts it will reach assets of $10.2 billion some time in early 2017, a stunning 60% higher than last year, and three times its next competitor. KBZ says that by the end of the first quarter of 2017, growth in deposits and loans will have surged 40% from last year.
Best Commercial and Investment Bank: KBZ
It’s not much of a contest in Myanmar’s CIB space. KBZ outreaches and out-muscles its competitors by some measure here too. Such heft opens doors, and KBZ is the first modern Myanmar bank to venture abroad, with offices in Bangkok, Kuala Lumpur and Singapore to follow Myanmar’s trade routes and diaspora. Beijing and Tokyo will likely be next, then Western financial centres.
KBZ is positioning itself as the go-to bank in Myanmar’s next phase in opening the economy, for the country’s more confident home-grown exporters. To that end, the bank has pioneered modern international treasury and money markets in the country, and has rolled out foreign currency fixed deposits and money market deposit facilities with large regional banks.
In treasury services, KBZ was the first bank to implement e-trading platforms for foreign exchange and money markets. It also set up a system that allows trading of foreign bonds for clients. In January, it stepped into the Singapore bond market, and is now planning forays into Japan and Thailand, adding international leadership to its domestic hegemony.
Best Digital Bank: CB Bank
In 2010, a mobile phone Sim card in Myanmar, one of the world’s poorest countries, cost around $2,000. Today, any mobile user can get connected for around $1, and hook up to a network that went from 7% coverage in 2012, to around 90% today, and much of it at least 3G. As local bankers lament, if only banking reform had moved as briskly as the telco industry in the new Myanmar.
But CB Bank, the former Co-Operative Bank, has moved briskly to bridge that gap with its ‘easibanking’ strategy. Leapfrogging into the digital era from banking practices more suitable for the 19th century, early adopter CB Bank claims a number of fintech firsts for Myanmar.
In 2011, it was the first Myanmar bank to open an ATM since the central bank shut such services off after a 2003 banking crisis. The following year, that ATM accepted international cards. Also in 2012, CB was the first to launch mobile and internet banking. In 2014 came mobile-based agent banking, and in 2015 came internet banking for Myanmar’s small and medium-sized enterprises.
Taking its cues from high-tech Singapore, CB Bank hopes to will get up to that country’s speed no later than 2020 – that is if the ultra-cautious central bank allows it.
Best Bank for SMEs: Yoma Bank
|Serge Pun, Yoma Bank|
SME – small and medium-sized enterprise – lending is hard going in a country like Myanmar. In a cash economy that doesn’t have an industry-credible credit bureau, mortgages, or reliable legal records on property title and ownership for collateral, lending to anyone – let alone taking a bet on a rising entrepreneur – is tricky at best. Then there’s the generously described ‘informal’ market to compete with. Loan sharks who do have collateral have been known to take out loans from licensed banks at state-set rates, and then lend it on at four times their cost of funds. Add a quixotic central bank to the mix, and it’s a brave firm that fashions itself as a SME-only lender, positioning to support the backbone of any fast-emerging economy.
That’s why Asiamoney recognizes the clear advances made by Yoma Bank, Myanmar’s fourth largest bank by assets. Banking small and medium-sized enterprises is at the heart of everything that Yoma does.
Its colourful owner, Serge Pun, has been around Myanmar longer than just about any other foreign investor and knows the scene very well. It also helps governance at Yoma that the World Bank’s International Finance Corporation sits in Yoma’s not-too-distant background as backer and overseer.
Yoma’s de facto CEO, Canadian Hal Bosher, himself a former IFC executive, says he knows every loan he’s made, targeting a sweet spot of $300,000 to $500,000 a deal. It takes a lot of shoe leather to have confidence in a risky but rising SME market like Myanmar, but as the country normalises, Yoma looks set to reap the rewards.
Best International Bank: UOB
|Loi Kai Cheow, UOB|
Stay in any international-standard hotel in Myanmar and if you pay by credit card, there’s a good chance you’re a customer of Singapore’s UOB Bank. That’s because Myanmar doesn’t have a clearing system to speak of, so Singaporean bankers stepped up. UOB, now run by Loi Kai Cheow, first opened an office in Yangon back in 1994, when the country’s leader Aung San Suu Kyi was under house arrest. And such are UOB’s intimate connections here that many of Myanmar’s banks – such as CB Bank – have ex-UOB staffers on board.
In 2015, UOB’s perseverance in Myanmar was rewarded by being granted branch status in Yangon, and permitted to handle corporate loans, trade financing and cash management for clients.
In 2013, UOB became the first foreign bank to establish an investment advisory unit in Myanmar to help its clients explore business opportunities in the country. With its cultural and historic connections dating back to colonial times, Singapore is probably Myanmar’s oldest and best friend in Asean, with a well-practised ability to look the other way as it provided economic succour, political support and boltholes to the junta of generals who ran the country for years.
Today, that discretion is paying off. Singapore is Myanmar’s second-largest investor and trading partner after China, commanding $10 billion in investments. Some of that is Singapore-based Myanmar interests investing back home. But regardless, it’s fair bet that UOB will be involved somewhere in these deals, where other international banks are not.
Best Bank for CSR: Aya Bank
Myanmar is not known as one of the most environmentally sensitive of nations. Several decades of rapacious generals trashing its forests for fast money has seen to that. Nor is it the cleanest of countries, nor its roads the safest. The Myanmar government admits around 14 people died every day last year in a traffic incident, though the actual number is believed to be much higher. And the government has little money or inclination for public education drives.
In such circumstances, it often takes smaller initiatives to spark a transformative effect. Step forward Aya Bank, which has launched a series of campaigns to get locals to belt up and save their lives when travelling in vehicles, and to be aware of preserving the natural resources around them.
Its Seat Belt Campaign movement is a common sight across the traffic-choked streets of the capital, as are the separated recycling rubbish bins around many of Aya’s branches in Yangon – an everyday sight in most countries, but a practice virtually unknown in Myanmar.
These CSR initiatives are thoughtful and socially focused, and a more sustained effort than getting a team of employees to muck in and help after a tropical cyclone has blown away villages. Azeem Azimuddin, Aya Bank’s CFO and adviser to the chair, says his staff do things like that “not because we must, but because we want to.”
View the complete Asiamoney issue
|Each issue of Asiamoney contains: