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UOB first foreign bank to offer Myanmar onshore loan

SINGAPORE — United Overseas Bank (UOB), one of two local banks to be awarded foreign bank licences in Myanmar, announced yesterday that it is offering an onshore loan to a French-Myanmar joint venture.

SINGAPORE — United Overseas Bank (UOB), one of two local banks to be awarded foreign bank licences in Myanmar, announced yesterday that it is offering an onshore loan to a French-Myanmar joint venture.

UOB said it is the first foreign bank in the South-east Asian country to offer an onshore loan, after nine foreign banks were granted provisional operating licences last October. The loan, an undisclosed sum, will be used to finance Rangoon Excelsior Company’s refurbishment of a former colonial building in Yangon into a five-storey hotel.

UOB opened its branch in Yangon on Monday. Another Singapore bank, OCBC, started its operations there two weeks ago.

For a start, a team of about 20 will run UOB’s operations in Myanmar. The bank said it expects to provide several more onshore loans within the first month of the opening to help finance regional and multinational clients across sectors such as manufacturing, hospitality and infrastructure. Some of the deals involve foreign direct investment from countries in Asia and Europe, it said.

As Myanmar continues to open up, its hospitality sector is one of four high-growth industries that UOB said it is keen to broker deals in. The other three include energy, infrastructure and construction, as well as manufacturing.

In total, these four sectors are expected to contribute 70 per cent, or US$154 billion (S$204 billion), of Myanmar’s gross domestic product in 2030, said UOB, citing figures from McKinsey Global Institute.

Mr Ian Wong, managing director and head of strategy and international management at UOB Group, said: “The financing of a new hotel in Yangon is in line with our approach of supporting businesses that are helping to drive Myanmar’s development. As tourism is expected to be a main contributor of new jobs in Myanmar over the next decade, we are keen to partner companies such as Rangoon Excelsior in helping to build the necessary tourism infrastructure to support the growth of this sector.”

UOB said it would focus on providing corporate loans, trade and project financing, as well as cash management solutions to regional and global companies entering Myanmar’s market with investments that aid the country’s long-term economic growth.

With foreign banks jostling for a share of the pie, Mr Wong said UOB has been engaging local banks in Myanmar to build up its network. “We will continue to engage and forge relationships with Myanmar banks as we look to collaborate with them to develop the local banking sector.”

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