Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Woori skeptical of banking in Myanmar
Woori Financial Group Chairman Son Tae-seung, left, and Union of Myanmar Federation of Chambers of Commerce and Industry Chairman U Zaw Min Win display a memorandum of understanding regarding support for Korean and Myanmarese companies, during the Korea-Myanmar Business Forum in Yangon in this September 2019 file photo. / Courtesy of Woori Financial Group
By Park Jae-hyuk
By Park Jae-hyuk
Woori Bank has remained skeptical of operating a bank in Myanmar, in contrast with the other three major commercial banks here that have vied fiercely to hold a dominant position in the Southeast Asian country, according to industry officials, Monday.
In January, the Central Bank of Myanmar (CBM) received applications from bidders for banking licenses that will be given to several foreign financial firms.
A Woori Bank spokesman told The Korea Times his company did not join the bid.
“We will focus on microfinancing in Myanmar for a while, rather than operating a banking business which still looks uncertain because of the poor financial system there,” he said. “At this moment, we do not have any plans to apply for a banking license.”
KB Kookmin Bank and Hana Bank applied for a “subsidiary license” and a “branch license,” respectively.
Among state-run lenders, the Industrial Bank of Korea (IBK) seeks to set up a subsidiary there, while the Korea Development Bank (KDB) wants to open a branch.
Kookmin and IBK failed to get licenses in previous biddings in 2014 and 2016.
Shinhan Bank has been running a branch in Yangon since the largest bank in Korea won the license in 2016.
Because the CBM is unlikely to give a new banking license to foreign banks for the next few years, Shinhan and the four Korean bidders have gone all out to occupy the leading position in the market.
“When Myanmar offers additional banking licenses to foreign banks, we will be able to seek more business opportunities,” a KB Kookmin Bank official said.
A Hana Bank official recognized Myanmar for its huge growth potential.
Initially, Woori Bank was also expected to participate in the latest bid, because its affiliates have been rapidly expanding their presence in Myanmar since 2012.
Woori Financial Group has 59 networks in the Southeast Asian country ― Woori Bank's Yangon office, 40 branches of Woori Finance Myanmar and 18 branches of Woori Card TuTu Finance.
The number is the largest among Korean financial firms.
In addition, its Chairman Son Tae-seung signed a memorandum of understanding with Union of Myanmar Federation of Chambers of Commerce and Industry Chairman, U Zaw Min Win, in September 2019 to support both Korean and Myanmarese companies.
Back then, a Woori Bank official said the commercial bank would try to get licenses for additional financial services there.
A banking license, however, was not the license the bank wanted.
Some experts agreed with Woori's skepticism, citing Myanmar's underdeveloped financial industry.
“Myanmar's financial environment is underdeveloped, because the country's national income is low,” the Korea Trade-Investment Promotion Agency (KOTRA) said in its report. “Due to the low credibility of banks, only 22 percent of people aged over 15 have a bank account.”
The KOTRA also said the country has barred foreign banks from offering certain services, such as loans for individuals, foreigners and local companies.
With Shinhan already operating in the country the chance of success for Korean bidders is assumed to be low because the CBM has tended to give banking licenses to foreign banks from different countries.