KBank as first foreign bank to invest in a local commercial bank

          Being the first foreign bank approved by the Central Bank of Myanmar to invest in a commercial bank of Myanmar, KASIKORNBANK (KBank) is ready to hold a 35-percent stake in Ayeyarwaddy Farmers Development Bank, or A bank, an emerging local bank that has grown rapidly and is focused on innovative services, with an extensive network of 18 branches located in major cities. The investment aims to promote multiple financial services, strengthen the Myanmar economy and link business networks and payment systems in order to accommodate local customers, and Thai and foreign businesses that have established their presence in AEC+3.

          Mr. Pattarapong Kanhasuwan, KBank Executive Vice President, noted that KBank has set its sights on expanding business and becoming a Regional Digital Bank through an Asset Light and Digital Expansion strategy. As the Central Bank of Myanmar has granted approval for KBank to hold 35 percent of shares in Ayeyarwaddy Farmers Development Bank, or A bank, KBank has thus become the first foreign bank to gain the approval of Myanmar to invest in a Myanmar commercial bank.
          This equity participation with A bank is a form of business that requires a relatively small investment, and in this case it is more effective than establishment of a foreign bank branch or a locally incorporated institution. Through this joint investment, KBank will be able to operate business immediately by building upon A bank’s strength as an emerging bank that has enjoyed rapid growth and is focused on innovative services, with profound understanding of the needs of all customer segments in Myanmar. At the same time, KBank can leverage its own strength and expertise in retail and SME businesses, digital banking and large corporate business with a myriad of financial services available. This move provides a synergy that can meet the needs of foreign investors, large corporations, SMEs and retail customers in Myanmar via an extensive network of 18 branches in major cities including Yangon, Mandalay, Myawaddy and Mawlamyine (Ayeyarwady). In strict adherence to the Beyond Banking philosophy, the two banks have a strategic plan of expanding digital banking services to both existing customers and a large number of presently unbanked people to ensure financial inclusion and to be on customers’ side for the enhancement of individual potential and sustainable business.
         A bank has assets of 314 billion Kyat or 6.4 billion Baht, with registered capital of 40 billion Kyat or 820 million Baht. Established in 2014, it has profound understanding of the needs of Myanmar’s retail and business customers. A bank and KBank share the vision and business guidelines of delivering sustainable services to the people of Myanmar with diverse financial services to serve the Myanmar market, with major objectives as follows:
      • ​​Promote bilateral trade between Thailand and Myanmar through the business partnership and KBank’s business network to ensure sustainability for international business and Myanmar’s banking business.
      • ​Develop products to meet the needs of local customers to ensure better financial inclusion via development of supply ​​chain finance in order to strengthen local businesses which are a key foundation for driving the country forward.
      • ​Expand digital banking business that focuses on development of electronic payment systems, including mobile banking applications to reach out to retail customers nationwide as they still have limited access to banking services, and a payment acceptance service for those seeking to make payment for goods and services, in order to lessen the country’s burden of cash use and management.
      • ​Focus on creating banking channels to allow retail customers to better access bank services and conduct transactions, especially via banking agents and expansion of ATM terminals.
          Mr. Pattarapong summed up that the equity participation represents a capital increase for A bank, which will thus strengthen its operating capital base. The investment is being undertaken via KASIKORN VISION COMPANY LIMITED (KVision), which is wholly owned by KBank. KVision is an investment holding company outside Thailand which has investment capital of around 690 billion Kyat or 14,000 million Baht, which will be used to seek new business opportunities in other countries for KBank. The equity participation with A bank will create multiple financial services, strengthen Myanmar’s economy and promote expansion of banking business in Myanmar through linkage of business networks and payment systems in alignment with KBank’s business strategy that prioritizes network expansion to provide services to local customers, as well as Thai and foreign businesses that have branched out into the AEC+3 region (AEC plus China, Japan and South Korea).