Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Myanmar coup pressures Korean banks
Kim Chang-woo, far left, head of KB Kookmin Bank Myanmar, stands along with high-level local officials at the official opening ceremony of the bank's branch in Yangon on Jan. 27. / Courtesy of KB Kookmin Bank
By Anna J. Park
By Anna J. Park
It has been less than a week since KB Kookmin Bank's Yangon branch in Myanmar ― the first one in the Southeast Asian country ― was launched, Jan. 27, but the Korean lender faces an emergency situation following the military coup there earlier this month.
An official at the bank said the regime change was unexpected, but operations at the Yangon branch have returned to normal.
“On Monday ― the day of the coup ― all financial transactions were frozen. But on Tuesday, the bank's financial operation went back to usual, as the freezing of accounts and transactions was lifted,” a bank official told The Korea Times. “We have completed checking on the safety of our staff in Myanmar.”
Regarding concerns that the sudden regime change escalates risks for KB's Southeast Asia business plans, the bank's official said that no one can be sure right now about the future impact of the coup and added that global businesses in Southeast Asia have been planned and executed from a long-term strategic perspective.
“Global business plans are not made with a short-term view. We've been preparing for this new business in Myanmar for years, and it's been executed with long-term, strategic goals and perspectives in mind,” the official explained.
“As the current situation was not something that we could've predicted in advance, there could be some impact on the timeline of the business, such as the bank's expansion plans in the country. However, we basically view our global businesses from a long-term standpoint,” the official added.
There are other Korean banks and insurance companies currently operating or preparing to open branches in Myanmar. They say they have not been seriously affected by the coup so far, but they will continue to monitor the situation closely.
“On the very day of the coup, our bank branch had to close down as financial transactions were frozen. Yet the branch resumed normal operations on Tuesday,” an official from the Industrial Bank of Korea (IBK) said.
The IBK Yangon branch officially opened last month. The official added it's still too early to determine the impact of the coup on overseas business plans.
The Korea Development Bank (KDB) also said its Myanmar branch went back to normal operations Tuesday, adding that it is closely monitoring the situation.
Kyobo Life opened a branch in Myanmar earlier this year.
“So far, not much has changed in our business plans. Of course, some of the tasks could be delayed a bit, or may be executed over a longer time span,” an official at the insurance company said, adding that its employees there have been told to work from their home in the country as the firm is monitoring the situation.
Although these financial companies say that they are closely following the situation with a long-term strategic business plan in mind, market watchers think the increased level of uncertainty in Myanmar could negatively impact their expansionary business plans for a while.
“As U.S. President Joe Biden warns of a possible imposition of economic sanctions on Myanmar, the uncertainty facing these Korean financial companies would grow further and could continue longer, hampering their business growth speed there,” a market insider pointed out.