The Australia and New Zealand Banking Group Limited (ANZ) has crossed its Rubicon, the Ayeyarwaddy, and been granted the full approval of the Central Bank of Myanmar to open and operate a branch earlier this month.
The official opening on October 2 saw ANZ shift gears.
The opening – which fulfils ANZ’s larger South Asia strategy – will complete a chain of branches and operations from one side of the Pacific and Indian Ocean to the other, across the Mekong region.
ANZ CEO for International and Institutional Banking Andrew Géczy said, “This licence approval is a final step in our plans to deepen our presence in the Greater Mekong, following the recent branch opening in Thailand.
“We can draw on our strengths in natural resources, infrastructure and agriculture – which match those of Myanmar – to connect global customers with the significant growth opportunities in this region.”
ANZ’s move from an entrant to the emerging market to operating bank has been relatively swift, receiving licence to open a representative office in 2012, and then bringing its full weight to bear in two and a half years.
CEO of the Myanmar branch, Rajesh Ahuja, is the man at the heart of ANZ’s Myanmar operation. He says now is a great time to be in the country.
“We see the country is poised to grow very well over the years to come. We want to be at the forefront to capture that opportunity,” he told Myanmar Business Today.
He says the licence will create a massive change at the branch.
“In the next two or three years we will learn a lot about the operating environment in the country, we have very strong governance and operations teams. They will help us refine and expand our strategy over the next 12 months and our risk capitalisation will go up after that.”
One of nine lenders to receive preliminary approval earlier this year, ANZ will be permitted to operate one branch with loans to foreign companies – in foreign currency.
It will not, however, be a retail lender, still the purview of Myanmar’s domestic banks.
Ahuja appears to indicate a steady-as-she-goes strategy for the time being at the newly recognised ANZ operation – the issue of governance and the need for clearer, more workable arrangements before moving to expand further.
He says the lender “needs to understand the negotiations of regulation much better” by working with the central government. “The idea is to continue seeking further clarifications to ensure we’re always in compliance with the regulations.”
Ahuja, however, pointed to challenges likely to impede ANZ’s efforts in Myanmar.
Indeed, Myanmar’s lack of clear outside telecommunication connections is an issue that bedevilled even this reporter from Melbourne.
“It’s not easy to get information on the ground, we have to rely heavily on our clients showing their data to our counterparts to deal with,” Ahuja says.
“We also need to be careful in interpreting rules and regulations of the country, and really cross checking with our external legal accounts.”
Ahuja says ANZ’s future plans in Myanmar won’t stray far from the path already set down. “We expect the business to grow and on-board a lot more clients in the coming years.”
The rapidly approaching elections are recognised by ANZ as stifling plans for investment. Ahuja said ANZ expects there to be far greater foreign investment next year.
But there’s a long way to go, for ANZ and for Myanmar.
David Ross is Myanmar Business Today's Special Correspondent based in Melbourne.