Myanmar’s largest private bank KBZ Bank may sell stake to foreign firm

Bloomberg

Myanmar’s largest privately-owned bank by assets says it’s willing to sell a stake to a foreign lender, pending a change in the country’s law, as it gears up to expand its operations in one of Asia’s most under-banked nations.

“In any emerging market, capital is important,” said Nang Kham Noung, an executive director of  KBZ Bank. “For us, we are open to foreign partnership. However that’s subject to the central bank and the regulation,” she said in an interview last week in Yangon.

Myanmar is considering changes to the companies law that would allow foreign investors to acquire stakes of up to 35 percent in local firms, a government official said last month. Existing laws don’t allow foreign investors to hold stakes in local banks, according to KBZ Bank. Like many companies in Myanmar, the bank needs foreign capital to keep pace with rising demand in Myanmar’s rapidly expanding economy, which grew by 8.1 percent last year.

KBZ Bank, founded in 1994, aims to more than double the number of its branches to 1,000 by 2020, as well as grow mobile financial services to reach people in rural areas, Nang Kham Noung said. It may consider an initial public offering, she said.

Myanmar’s banking system is “immature” and regulation remains rudimentary, said Nam Soon Liew, managing partner for ASEAN financial services at the consultancy EY in Singapore. “Myanmar banks need to make sure that their businesses, operations and risk management are more robust, that they have stronger balance sheets, stronger management control, product platforms and accounting systems,” he added.

About 77 percent of the population has no access to banking, according to consultancy Roland Berger.

Group Interests

KBZ Bank is part of the KBZ Group, which was founded by Nang Kham Noung’s father Aung Ko Win. The business empire includes gems and jade mining and trading, aviation, insurance and construction, according to the group’s website. Aung Ko Win, his wife and three daughters sit on the group’s board, the website shows. Unlike several other local companies, KBZ wasn’t subject to international sanctions under the former military government, the bank said.

“We are working towards international standards in corporate governance” and plan to include more independent directors on KBZ Bank’s board, Nang Kham Noung said. She declined to give details of the current composition of the board.

KBZ Bank’s assets grew at a compound annual rate of 44 percent between 2012 and 2016, and now stand at $8 billion, according to the bank. It has 17,889 employees. The bank is recruiting more staff, targeting Myanmar nationals who have lived abroad as well as foreigners, Nang Kham Noung said.

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.