RANGOON — KBZ Bank is willing to sell a stake in its operations to a foreign investor if the law permits, according to a report.
Existing laws do not permit foreign investors to hold stakes in local banks in Burma, but changes are being considered this year to the Companies Act that could allow foreigners to take stakes of up to 35 percent in Burmese firms.
“In any emerging market, capital is important,” said Nang Kham Noung, an executive director of Burma’s largest privately owned bank by assets, in the Bloomberg report.
“For us, we are open to foreign partnership. However that’s subject to the Central Bank and the regulations,” she said.
KBZ Bank has embarked on rapid expansion in Burma and is aiming to double the number of its branches in the country to 1,000 by 2020 and grow mobile financial services in rural areas. The bank has also opened representative offices and services abroad, including in Singapore and Thailand.
It may consider an initial public offering, the report said.
The bank’s assets stand at US$8 billion after growing at a compound annual rate of 44 percent between 2012 and 2016, according to the report.
It has almost 18,000 employees and is seeking to hire more staff, including Burmese who have lived abroad and foreigners, amid rapid changes in the country’s finance sector.
Burma’s banking system is one of the most underdeveloped in the world and was “unable to fulfil its role and fuel the nation’s aspiration for fast and inclusive economic development,” the consultancy firm Roland Berger said in a report in 2016.
However, starting from a very low base, the banking sector was one of the fastest growing in the Southeast Asia region, the firm said.
Last week, the World Bank announced that it was working with the government to conduct the first audit of Burma’s weak state banks in decades, in an effort to modernize the country’s banking system and stave off risks to economic growth.