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Best domestic bank: KBZ Bank
Best digital bank: KBZ Bank
|Mike DeNoma, KBZ Bank|
Few banks dominate their own market like KBZ in Myanmar, which covers close to half of all banking transactions made in this young market. KBZ is the most advanced of Myanmar’s homegrown banks. Now with Asian banking stalwart Mike de Noma – a veteran Standard Chartered banker and former CTBC chief executive in Taiwan – installed at the helm, founder Aung Ko Win has shown that he wants the bank to vault ahead of the competition as the country embarks on deeper economic reform.
In March 2018, KBZ introduced a one-stop centre for Myanmar’s expanding small and medium-sized enterprises sector, covering a wide range of services from loan applications and customer matching to official compliance procedures. KBZ has been active in establishing a credit bureau for Myanmar’s SMEs. Although commonplace in most markets, a basic facility to determine creditworthiness is almost unknown in Myanmar.
On the digital front, it has been impossible to ignore KBZ this year, with the successful launch of KBZPay. While smartphone penetration is estimated at about 90%, Myanmar’s unbanked population is put at roughly 85%; KBZPay aims to bridge that digital divide.
In just six months from launch, the now ubiquitous KBZPay has attracted one million customers and 40,000 agents. The bank claims its digital retail customer base has grown 366% since launch. Digital remittances have almost doubled and bill payment through the app has grown near fivefold.
For the moment, functionality works best within the bank – and with a market share of more than 40%, KBZ has created a lucrative walled garden. But central bank initiatives to open digital platforms should mean Myanmar customers can soon move their cash around all banks: when that happens, the fast-moving KBZ will likely still dominate.
“Mobile banking is critical towards offering accessibility to financial services to all,” the bank says.
Best corporate and investment bank: CB Bank
As Myanmar’s primary resources sector opens up and more deposits are found, CB Bank expects a bonanza. This year, CB Bank says it captured the bulk of the market in letters of credit issuance for oil and gas-related clients.
Alongside this push into resources, the bank has become a leader in Myanmar’s foreign exchange business. The Central Bank of Myanmar notes that CB led the market for the nine months of 2018. CB has put down a physical footprint at Myanmar’s borders with China and Thailand, opening four new trade centres to serve these important land crossings.
“We see a huge potential in these places, as they are prime locations in terms of border trade,” the bank says.
CB has tied up with Seedstars, a Swiss-based investor focused on financing technology startups in the developing world. The two have launched an incubation centre in Yangon, which the bank hopes will become the “go-to space for fintech, startups and investors.” And it has hooked up with ride-sharing app Grab to open bank accounts for Grab’s drivers in Myanmar.
Best international bank: OCBC
|Daniel Tan, OCBC|
OCBC’s Daniel Tan has carved out an inventive franchise in Myanmar, in spite of the retail and commercial limitations that foreign banks operate under in the country.
After doubling branch capital to $150 million in 2017, Tan, who is general manager, tripled the number of staff and stepped smartly into project and export finance, foreign exchange and the remittance market.
In 2018, OCBC underwrote the upgrade of equipment of a leading local telco to the tune of $62 million. In another deal, OCBC provided $13 million in long-term financing for a hydroelectricity plant, while in healthcare, OCBC lent $20 million to build a new 200-bed international private hospital backed by a Thai group.
Yet other deals include a $30 million, three-year term facility to finance a large property development in Yangon and a $40.2 million, seven-year syndicated loan facility, which it says was the first of its kind in the country, to Malaysia-backed OCK Yangon to build 900 new telecoms towers.
In 2018, OCBC says investments from customers reached $500 million.
Tan’s team handled almost 1,400 inward remittance transactions worth $815 million, while in forex, OCBC claims a 12% market share with one of the largest transaction volumes in the country.
OCBC’s business banking platform Velocity@ocbc, now almost four years old in Myanmar, experienced a 28% jump in users. The bank says 83% of its customers in Myanmar use the app, which processes 60% of their transactions.
Best bank for SMEs: AYA Bank
In an emerging economy where an estimated 90 to 95 out of every 100 registered businesses are small and medium-sized enterprises (SMEs), Zaw Zaw’s Ayeyarwady Bank wins plaudits from its peers for its lively SME business.
Aya’s tactic has been to partner with multilaterals, development finance institutions and aid agencies, providing a leg-up to Myanmar’s emerging small business community. For example, Aya has teamed up with the state-backed German Investment Corporation (DEG-KfW), as well as the United States Development Credit Agency and Japan’s JICA to identify customers and provide loans with agency support. The French government’s development wing, AFD-Proparco, is also a partner, as is the Asian Development Bank.
Today, SMEs account for 16% of Aya’s total loan book, and the bank expects that level to double by 2022 as Myanmar moves closer to middle-income status.
Best for microfinance: Pact
Pact Myanmar, the NGO that manages Pact’s development portfolio in the country, is one of the largest non-profits operating in Myanmar and has been active since 1997. With funding from a mix of private and public backers such as USAid, 3MDG, Chevron, Coca Cola and Ooredoo, its development programmes reach three million people.
Its integrated programmes span several separate projects, worth a total of $62 million, in the fields of governance, capacity development, health, livelihoods, community development, hygiene and access to water, and in food security.
Pact’s Global Microfinance Fund is Myanmar’s leading microfinance institution, with 800,000 active borrowers – 98% of them women – and is present in more than 50 townships and 7,000 villages.
Pact directly serves more than one million households in 75 townships and almost 10,000 villages with improved access to financial resources and a range of services and capacity development in the health, livelihoods and natural resource management sectors.
Pact supports some 2,500 village development funds and works with hundreds of community-based organizations.
Best bank for CSR: AYA Bank
The May tour by English football team Leeds United may not have won Leeds many friends outside Myanmar, as foreign critics railed against touring a country that ethnically cleanses its Rohingya Muslim minority, but that wasn’t the point for tour sponsor Ayeyarwady Bank – its focus was all domestic.
Myanmar’s second-largest bank won widespread national prominence while local kids from multi-ethnic backgrounds got to attend a series of football clinics staged by Leeds stars.
The tour was part of Aya’s wider corporate social responsibility efforts during a busy year when it built hospitals and schools and financed ambulances across the country.
Zaw Zaw’s Aya Bank claims to have committed $90 million in CSR efforts since it was founded in 2010. Beyond sorely needed infrastructure, staff are regularly encouraged to donate blood and plant trees. Aya also sponsors disaster management programmes for vulnerable rural areas in the Ayeyarwady (Irrawaddy) river delta region, and it provided financial support for relief camps for flood victims in four stricken townships after recent inundations.
Best for premium banking services: CB Bank
CB Bank was a pioneer of premium banking in Myanmar, launching its Prestige brand in 2015. These are very early days for private banking in Myanmar: the wealthy still prefer to place money in Singapore and Bangkok, out of reach of covetous state fingers in a country still some way from a reliable rule of law and secure democracy.
Still, CB Bank is making inroads, offering the usual bells and whistles – personalised, preferential travel and dining arrangements, lounge and club access, networking opportunities and so on – associated with private banking, alongside various investment and insurance products.
In 2018, CB Bank claimed that deposits in its Prestige product more than doubled, as it added 50% more clients. The bar is low by international standards – just $200,000 in assets for access – but CB plans to introduce higher tiering, with a $700,000 entry level service due for launch this year.