Reconceptualising Myanmar’s banking sector

Transcript

World Finance speaks to Phyo Aung and Min Wi-Oo from Ayeyarwady Bank, on the foreign investment a re-opened Myanmar is gathering, and the human resources challenge for the banking sector to continue to grow.

Achieving broad consensus on banking reform has been an issue riddling Myanmar’s political scene. Now here to tell us how banks are growing their capital base in the middle of this concern, Phyo Aung and Min Wi-Oo.

World Finance: First, can you tell me how deeply impacted was your banking sector after the 2008 financial crisis?

Phyo Aung: Myanmar – especially the banking sector – was not affected directly, because the country had actually been isolated for almost three decades and recently opened up after 2010.

But most of the Asian countries, especially Japan, Korea, Singapore, Thailand and China, are trade partners of Myanmar. And all these countries actually were affected hugely, so it would really affect Myanmar indirectly especially the trade sectors of foreign investment and the migrant worker industry. So it wasn’t really affected directly, but affected indirectly.

World Finance: Can you tell about the long-term impact on the retail sector?

Min Wi-Oo: The country just changed, the new government and new financial investment laws now they are new in the international retail sectors, they are trying to come into Myanmar and also starting new businesses. This year we are going to start on the YSE – Yangon Stock Exchange – in Myanmar now.

World Finance: So how important has attracting foreign corporations business to your bank been to your overall growth?

Phyo Aung: Of course we need foreign investment to boost the countries’ economy, as well as the Myanmar banking finance industry. As a private bank in Myanmar we are trying to develop ourselves to serve those multinational corporations, when they are actually interested and intend to invest in Myanmar.

In order to do that there are a lot of technical transfers, and then it will really help to reduce unemployment rate, and of course also boost consumption sectors.

So as a private bank of Myanmar we always try to be ready to serve those international corporations, together with some of the partners’ foreign banks.

World Finance: Obviously a dramatic reconceptualisation is required for the banking sector, where would you begin?

Min Wi-Oo: There are some issues: things that the government need to provide financial institutions, such as legal protection and also human capital. We need a lot of resources, human resources, talented experience, training, those would be the key issues.

World Finance: OK; so we think that foreign lenders of course are going to play a big role, can you tell about some of those big foreign players that we should watch out for?

Phyo Aung: Those foreign banks who’ve got the licence to operate some banking business in Myanmar. They will be playing a very important role to boost the country’s economy, as well as to help to develop the Myanmar entire banking sectors.

And as a private bank in Myanmar, we have also a lot of plans to work together with the foreign players, foreign banks to develop the country’s economy. Like strategic partnerships in some areas, trying to develop human capital, and provide a lot of seminars and training to educate bank users as well. And how the banks are playing an important role to develop the country’s economy.

So I think the foreign banks and foreign corporates role in Myanmar will be definitely important to develop the country’s economy, and of course our banking and finance industry.