A Singapore-based bank -- the United Overseas Bank (UOB) has provided its first onshore loan to a French-Myanmar joint venture company for refurbishing a new hotel in Yangon following the opening of its branch in the city, official media reported Friday.
UOB is one of the nine international banks granted licenses in October 2014 to open a local banking branch in the commercial city to provide services to foreign companies such as trade and project
financing, corporate loan and cash management solution.
UOB is expected to offer more onshore loan to its clients in the energy, manufacturing, hospitality and infrastructural construction sectors, the report said.
UOB is the fourth foreign banks out of nine which have started their banking business in Yangon since April. The prior three banks are Bank of Tokyo Mitshubishi UFJ Ltd (BTMU), Sumitomo Mitsui Banking Corporation (SMBC) of Japan and Overseas Chinese Banking Corporation (OCBC) of Singapore.
Nine foreign banks including the four were granted service operation licenses by the Myanmar government in October last year, the first time in more than five decades.
The nine granted foreign banks include three from Japan, two from Singapore and one each from China, Malaysia, Thailand, Australia and New Zealand.
These banks are allowed to operate wholesale banking and to lend money to foreign investment companies and local banks.
The foreign banks would also be allowed to lend money to local companies through local banks or to lend a syndicated loan to local companies in cooperation with local banks.
The approved banks were short listed from 25 which bid for the licenses in the first phase of selection in July last year.
There were 43 foreign bank representative offices stationed in Myanmar up to 2014, of which 25 made the bid for banking licenses.
For the past decades, Myanmar allowed foreign banks to open representative offices only in the country for observation without permission to operate banking services.
Meanwhile, there are also 25 local private and four state-owned banks in the country.