Moo Sun on banking in Myanmar | Ayeyarwady Bank
World Finance interviews Moo Sun, Chief Operating Officer of Ayeyarwady Bank, on the potential of Myanmar's banking sector
Myanmar is back on the world stage after years of isolation. In April, the EU lifted the last of its sanctions against the country, and its banking sector is going through rapid changes to catch up with the outside world. Moo Sun, Chief Operating Officer of Ayeyarwady Bank, talks about the reforms and challenges the Myanmar banking sector has experienced this year, Ayeyarwady Bank’s position in the country, and his predictions for the financial industries in the next few years.
World Finance: First, give us an overview of the banking sector in Myanmar, in the period of isolation that you’ve been through?
Moo Sun: At the top would be the central bank of Myanmar. It used to be that the Central Bank was in the department of the Ministry of Finance, but now they have their independence. Below that would be the four state-owned banks, and there are now 21 private banks.
For some 50 years they have been in isolation. The banking then, in fact still very much now, is very cash-based. Very little financial intermediation between depositors and borrowers, for the fact that there’s very little accessibility of service.
“The opportunities are there. With a population of 60 million, a very young and educated workforce”
World Finance: There’s been a period of change in the last few years, and it’s true to say that you’re getting a lot of interest from international investors now?
Moo Sun: Since 2011, there have been a lot of changes, politically and economically. The banking sector itself, we have seen a lot of changes as well. Some of the key reforms would be the unification of the exchange rate. That was an important part of the reforms. With the new foreign investment law there’s now a lot more interest in the country.
The opportunities are there. With a population of 60 million, a very young and educated workforce. And because Myanmar sits in a very strategic geographical location, with abundant resources, there are plenty of opportunities.
World Finance: Tell us about Ayeyarwady Bank; who are your clients, and what services do you provide?
Moo Sun: We started operations in August 2010, so we are a relatively young bank. Just over three years old. Today we have 45 branches, our customer base is about 150,000, and in terms of financials we are over $500m in assets.
Our deposit customers are mostly retail customers, with some 80 percent of our deposits being individuals. On the loans we have a lot more businesses.
In terms of the products and services, for domestic customers we provide all sorts of services from deposits and loans to making remittances, safe deposit boxes, the whole lot, you know, as far as the domestic business is concerned.
In terms of international business, we provide foreign exchange, foreign currency accounts, overseas remittances and letters of credit. That pretty much covers the basic international services that we have.
“One of our key plans is to make our services accessible to the population”
World Finance: And what’s Ayeyarwady Bank’s strategy going forward?
Moo Sun: I think one of the key things would be to make our services accessible to the population. So, one of the key strategic action plans that we have is to grow our branch network. Today we have 45 branches, we hope to have 100 branches within the next two years. We’re aggressively trying to expand on our card services, and we hope to be able to offer debit cards and credit cards. So that is on the domestic side.
On the international side, we feel that now we can be a leader in this market. Because it’s a very new business for private banks. On the corporate side, I think it’s important that we actually include all stakeholders, so in areas of governance particularly. I think this is one area that we need to enhance. So, going forward those are three core areas that we’re looking at.
World Finance: Finally, give us your future outlook for the banking sector in Myanmar over the next five to 10 years.
Moo Sun: Just looking at the figures, comparing 2007 and 2012, the deposit portfolio has grown some eight times. Now, that gives an indication of the trust, you know, in the banking sector domestically. Now, with the foreign investors coming in, once the government’s stabilised, we expect growth to be even more tremendous.
One of the areas that would benefit most would be the banking sector. So for banks with the right strategy, I think they will be able to capture quite a lot of those businesses. So we are very optimistic about the potential for the banking industry.
World Finance: Mr Moo Sun, thank you.
Moo Sun: Thank you for having me.