YANGONThe state-owned Krung Thai Bank is looking to form a joint venture in Myanmar following the successful launch of its representative office in the neighbouring country.
Foreign financial institutions doing business in Myanmar are required to expand in four stages: a representative office, a joint venture with a local financial institution, a subsidiary and a branch, KTB president Vorapak Tanyawong said after the representative office was opened in Yangon last week.
''The second step, however, takes more time. It depends on Myanmar's approval and the state of our operation there. But we should be able to see progress within the next five years,'' Mr Vorapak said.
He said the bank has provided financial support to large Thai companies investing in Myanmar as well as small and medium-sized enterprises, mostly in border trade and supply chain businesses.
These businesses have high potential to grow in line with Myanmar's economy.
The neighbouring country's gross domestic product (GDP) is projected to grow in double digits each year over the next few year compared with a stable growth rate of 4-5% of the Thai economy.
KTB forecasts Thailand's GDP growth in a range of 4.4% to 5.5% next year, while loan growth at large local banks will be 1.5 times the GDP growth rate.
Mr Vorapak said the bank will also focus on Myanmar companies, which are small and largely dominated by conglomerate businesses of some big families, such as the KPZ Group.
Agriculture is another key focus, as it is the largest contributor to Myanmar's GDP.
''Our advantage as a state-owned bank, financial expertise and familiarity with Asean culture will afford KTB smooth access to the business segment,'' said Mr Vorapak.
KTB, Thailand's second-largest bank, is 59.01% owned by government agencies. With a 55.07% stake, the central bank's Financial Institutions Development Fund is its major shareholder.
Mr Vorapak said KTB is also interested in Cambodia, Laos, Myanmar and Vietnam ahead of formation of the Asean Economic Community in 2016. It plans to open a branch in Ho Chi Minh City next year, completing its Indochinese network.
About the author
- Writer: Somruedi Banchongduang
Position: Business Reporter