Shinhan to open Myanmar branch next year
By Kim Jae-won
Cho Yong-byoung Shinhan Bank CEO
Shinhan Bank said Monday it plans to reach the Myanmar market next year by opening a branch there, seeking to expand its presence in the Southeast Asian country as part of its global strategy to find new revenue sources.
The nation’s most profitable lender said it aims to open its branch in Yangon in the first quarter of 2017. Shinhan is the first Korean lender that has won a preliminary license to operate in the country. The bank plans to win official approval within a year.
“Our goal is to offer services to customers in Myanmar from the first quarter of next year. We are preparing for the opening, though a detailed business plan is not available yet,” said a Shinhan spokesman.
The announcement came as Shinhan is strengthening its foothold in the region with its thriving Vietnamese business. The bank has invested in the country for more than two decades by offering banking services to the people of Vietnam since 1995. The bank is one of the largest foreign lenders in the country along with HSBC.
Shinhan said Myanmar will play a crucial role in tapping deeper into the Association of Southeast Asian Nations market, adding that the country’s economy has grown more than 5 percent every year since 2011. The nation’s gross domestic product expanded 8.5 percent in 2014, according to data from the World Bank. Its 2015 figure is not available yet.
The stabilized political conditions of the country will also beef up economic growth, Shinhan said. The National League for Democracy, a political party led by its Chairwoman Aung San Suu Kyi, is consolidating its power in the country after winning a majority of the seats in the general election last year.
Shinhan Financial Group, a holding company of the lender, said that the group expects its Myanmar business to grow like that of Vietnam.
“In 10 years, we may see that our Myanmar business will reach the level of what we are doing in Vietnam. We will invest in Myanmar to find new opportunities,” said a spokesman for the group.
Korean financial groups are reaching out to overseas markets, mostly in Asia, but are having trouble in showing good performances due to regulatory issues from the local governments, language barriers and cultural differences.
The financial regulator is also pushing for market players to go global, but they said the government needs to support them more aggressively by signing big infrastructure deals with the local governments.
“Japanese banks have advanced into Asian markets successfully on the back of the Japanese government which has invested in developing infrastructure in these countries. The Korean government should learn more from Japan,” said a manager of a local financial group, asking not to be named.