RANGOON — Kanbawza (KBZ) Bank is to become the first Burmese lender to open a representative office in a foreign country, after the Bank of Thailand issued the firm a license late last month.
One of the largest private commercial banks in Burma, KBZ Bank was founded in 1994 in the Shan State capital, Taunggyi. Its parent company, KBZ Group, also has considerable interests in aviation, with its own domestic airline, Air KBZ, and a large majority stake in Myanmar Airways International.
“As the largest bank in Myanmar, we can use our extensive knowledge of the country’s financial markets to encourage and promote trade, as well as provide advisory services to Thai businesses looking to enter Myanmar,” said Than Cho, senior managing director of KBZ Bank.
In the 2015-16 financial year, Thai investment in Burma totaling US$236 million was approved, an increase from approximately $165 million in 2014-15. Bilateral trade between Burma and Thailand over the past five years has been worth $6.8 billion, according to Than Cho of KBZ.
However, KBZ Bank still awaits Thai government approval before it can open a branch office to provide banking services—the next step envisaged.
“I don’t know how long it will take,” said Than Lwin, an advisor to KBZ Bank. “[Procedures] are different from one country to another. In the case of Thailand, I think it will be swift. It is a bit slow in Singapore.”
KBZ Bank has applied to also open representative offices in Singapore and Malaysia.
“Since we are doing border trade with [Thailand], I hope [Thai authorities] will grant a license quickly,” Than Lwin said. “It is likely the branch will be opened within the year if things go well.”
Than Lwin also said he hoped that KBZ Bank’s opening of a branch in Thailand would aid the sending home of remittances for some 3 million Burmese migrant workers in Thailand.
In the past, private Burmese banks have made arrangements with banks in Thailand, Malaysia and Singapore with an eye on remittances from Burmese migrant workers. However, most migrant workers still prefer informal systems of money transfer—such as the hundi system—involving shadowy networks of brokers stretched across the respective countries, partially due to a legacy of distrust in Burma’s formal banking sector.
KBZ Bank and its chairman Aung Ko Win formerly faced Western sanctions for links to senior members of Burma’s former military junta. However, the lender is currently ranked highly on the Myanmar Center for Responsible Business (MCRB) transparency index, and has been on Burma’s official list of top taxpayers for four consecutive years.
