SCB gets tentative nod for Myanmar licence

SCB gets tentative nod for Myanmar licence

Siam Commercial Bank (SCB), the country's fourth-largest lender by assets, has won preliminary approval for a subsidiary business licence in Myanmar, targeting 7 billion baht in loans in the first five years of operation.

The bank expects to set up the subsidiary and begin operations by the end of 2020, said chairman and chief executive Arthid Nanthawithaya.

The licence enables the bank to open a subsidiary bank 100%-owned by SCB and provide the same comprehensive commercial banking services as branches in Thailand. A subsidiary licence allows branches in 10 major business areas.

SCB has had a representative office in Myanmar since 2012.

The bank is ready to provide total financial solutions to corporate, small-business, and retail clients in the neighbouring country and to use Myanmar as a strategic country for expanding the international business network, Mr Arthid said.

In the initial phase, SCB will focus on catering to Thai corporate clients with existing investments in Myanmar and others who want to explore trade and investment there.

"We are ready to serve clients with a full range of financial solutions like loans, foreign exchange, trade finance, supply chain management and cash management," Mr Arthid said.

Foreign banks are allowed three licence types in Myanmar: establishment of a commercial bank as a subsidiary, foreign bank branch and equity participation with a local bank.

Bangkok Bank is the sole Thai bank with a foreign bank branch licence in Myanmar, having received one in 2015.

Mr Arthid said SCB stands ready to bridge trade and investment between Thailand and Myanmar, as well as regional trade within the CLMV+2 countries (Cambodia, Laos, Myanmar, Vietnam, China and Singapore).

This step will lay the groundwork for long-term growth, he said.

"Myanmar is among the region's top potential economic and business countries attracting the interest of investors worldwide," Mr Arthid said. "Over the past five years, average GDP growth has been in a range of 6-7%."

Thailand has cumulative permitted investment in Myanmar of about US$11 billion and is the third-largest investor after Singapore and China.

Thailand is also Myanmar's second-biggest trade partner after China, with trade value of $7.6 billion in 2019.

More than 100 Thai business operators are investing in Myanmar with SCB support. The bank's clients operate in a broad range of sectors, including consumer products, energy, industrial estates, manufacturing and agro-industry.

With the licence, SCB will be able to extend banking services to retail customers in Myanmar from Jan 1, 2021.

Myanmar's retail banking market is an attractive opportunity given the country's population of 54 million, Mr Arthid said.

SCB will consider a range of options for offering financial products and services to local customers, including deposits, personal loans, digital banking and wealth management.

SCB shares closed yesterday on the Stock Exchange of Thailand at 70.25 baht, down 3.25 baht, in trade worth 1.17 billion baht.


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