Financial Services
From The Report: Myanmar 2017
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In the wake of sweeping reforms undertaken since 2011, Myanmar’s banking sector has been advancing at a rapid pace to become safer, sounder and better regulated. The majority of banking institutions are rising to the challenge by adopting international best practices, especially in terms of accountancy, and investing in systems that promise to transform the way they operate. Until recently banking in Myanmar was a highly controlled, state-centric, ledger-entry affair. However, after undergoing a process of modernisation, it has become an industry of great opportunity. Indeed, thanks to significant expansion into underbanked corners of the economy, growing international interest and a series of large-scale reforms, the sector may also be one of the world’s most promising.

This chapter contains interviews with U Kyaw Kyaw Maung, Governor, Central Bank of Myanmar; U Yin Zaw Myo, Managing Director, Yangon Stock Exchange; Quach Hung Hiep, Senior Executive Vice-President, Bank for Investment and Development of Vietnam; and Simeon Preston, Group COO, AIA Group; as well as a roundtable with Azeem Azimuddin, CFO and Advisor to Chairman, Aya Bank; Antony Picon, Managing Director, Colliers International; Kim Chawsu, Managing Partner, Katalysts Investment Group; and Hal Bosher, CEO, Yoma Bank.

Articles from this Chapter

Overview

Picking up the pace: Ongoing reforms strengthen oversight of the sector, while institutions race to modernise
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In the wake of sweeping reforms undertaken since 2011, Myanmar’s banking sector has been advancing at a rapid pace to become safer, sounder and better regulated. The majority of banking institutions are rising to the challenge by adopting international best practices, especially in terms of accountancy, and investing in systems that promise to transform the way they operate (see analysis). “The push at the banks is for International Financial Reporting Standards (IFRS) – core banking systems…

Analysis

Cyberspace race: Banks investing in new technology to modernise operations and differentiate from competitors
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Not only are Myanmar institutions improving in safety, soundness and accountancy, they are also expanding their use of technology. Several banks are adopting the latest systems in an effort to become modern financial services companies, while more generally the country is developing its digital strategy to allow for channels that enhance the banking system. The hope is that the sector will be able to make the leap from traditional paper-based banking to institutions which run sophisticated…

Analysis

Cyberspace race: Banks investing in new technology to modernise operations and differentiate from competitors
OBG
plus

Not only are Myanmar institutions improving in safety, soundness and accountancy, they are also expanding their use of technology. Several banks are adopting the latest systems in an effort to become modern financial services companies, while more generally the country is developing its digital strategy to allow for channels that enhance the banking system. The hope is that the sector will be able to make the leap from traditional paper-based banking to institutions which run sophisticated…

Interview

Monetary management: U Kyaw Kyaw Maung, Governor, Central Bank of Myanmar (CBM), on liquidity and the growth of the domestic banking sector
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Interview: U Kyaw Kyaw Maung In terms of liquidity management, how is the CBM maintaining stability in the market? U KYAW KYAW MAUNG: To achieve the objective of maintaining price stability, the CBM has been implementing a reserve money-targeting monetary policy framework. Under the reserve money-targeting framework, the CBM controls the liquidity position by using monetary operations such as deposit auctions to draw in excess liquidity when there is excess liquidity in the economy, and…

Interview

Monetary management: U Kyaw Kyaw Maung, Governor, Central Bank of Myanmar (CBM), on liquidity and the growth of the domestic banking sector
OBG
plus

Interview: U Kyaw Kyaw Maung In terms of liquidity management, how is the CBM maintaining stability in the market? U KYAW KYAW MAUNG: To achieve the objective of maintaining price stability, the CBM has been implementing a reserve money-targeting monetary policy framework. Under the reserve money-targeting framework, the CBM controls the liquidity position by using monetary operations such as deposit auctions to draw in excess liquidity when there is excess liquidity in the economy, and…

Overview

Depth of potential: Azeem Azimuddin, CFO and Advisor to Chairman, Aya Bank; Antony Picon, Managing Director, Colliers International; Kim Chawsu, Managing Partner, Katalysts Investment Group; and Hal Bosher, CEO Yoma Bank, on developing the mortgage market
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Interveiw:Azeem Azimuddin, Antony Picon, Kim Chawsu, and Hal Bosher Can you discuss the main challenges that banks might encounter in their efforts to drive a profitable mortgage market here in Myanmar? AZEEM AZIMUDDIN: There are structural issues and there are operational issues. On the operational side, there is no central land registry. There are also difficulties concerning inheritance and similar legal challenges relating to perfection of security and foreclosure. On the financial services…

Overview

Capital comeback: Regulations strengthen as trading gets under way on the exchange and officials assess the next steps in its development
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The successful development of the capital markets in Myanmar amid a period of sweeping reforms is a significant achievement. After decades without a full exchange and years with little more than over-the-counter (OTC) trading, the country now has a robust platform for fundraising and trading in the Yangon Stock Exchange (YSE). It also has the market infrastructure in place to support it. Amid the widespread economic and political changes over the past several years, including the historic…

Interview

A strong beginning: U Yin Zaw Myo, Managing Director, Yangon Stock Exchange (YSX), on the development of the bourse
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Interview:U Yin Zaw Myo How far has the YSX progressed, and what milestones do you want to reach in the medium term? U YIN ZAW MYO: Within the first eight months of YSX starting stock trading, three companies were listed on the exchange, and we hope to add more during the 2016 fiscal year. To date, we have a total trading volume of over 1.5m shares in the market, worth around MMK59bn ($53.1m) overall. This is a significant amount for a market this small, especially when compared to the Lao…

Interview

Beyond banking: Quach Hung Hiep, Senior Executive Vice-President, Bank for Investment and Development of Vietnam (BIDV), on the bank’s operations in Myanmar
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Interview:Quach Hung Hiep What were the factors behind the decision to apply for an operating licence for Myanmar? QUACH HUNG HIEP: We see great potential in the Myanmar market. Once a closed economy, Myanmar is now transforming, and integrating its market with the ASEAN region and the world. In recent years, we have witnessed a rapid increase in commerce and investment activities from Vietnamese corporates, with most of them being BIDV’s customers. At the same time, we believe that Myanmar…

Overview

Risk and reward: Investors see great potential in this untapped market, while regulations struggle to keep pace with ongoing liberalisation
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Recent liberalisations are set to transform the insurance sector in Myanmar, and the potential for future growth is remarkable. For almost half a century, business lay entirely in the hands of the state. That fact, plus economic isolation and slow growth, mean that the country is presently the least insured in the ASEAN region, with penetration at 0.05%. Now, the licensing of private insurers and the opening of the market to foreign players are expected to lead to major growth in this untapped…

Interview

Natural stabiliser: Simeon Preston, Group COO, AIA Group, on developing the insurance industry and improving penetration rates
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Interview: Simeon Preston What steps can the insurance industry take to improve penetration and density levels? SIMEON PRESTON: In the initial phase of market development, customers will need strong inducements and incentives to participate in long-term savings and protection. On the supply side, product offerings must be simple and clear, with propositions ensuring full customer understanding at the time of purchase and an appreciation of the value of what is being purchased. On the demand side,…