Mitsubishi UFJ Financial Group Inc. said Friday it will ally with Myanmar’s Co-operative Bank Ltd. to tap growing demand for financial services in the Southeast Asian nation as it shifts to democracy.
Lending unit Bank of Tokyo-Mitsubishi UFJ Ltd. agreed Thursday on a preliminary alliance to provide technical support to the Myanmar lender in areas including trade finance and foreign exchange, Mitsubishi UFJ said in a statement.
The nation’s biggest bank joins Sumitomo Mitsui Financial Group Inc. in forming a tieup with Myanmar lenders to serve Japanese companies looking to enter the emerging economy as it opens up after five decades of military rule. Japan, Myanmar’s biggest creditor, wrote off some $3.7 billion (¥320 billion) of Naypyitaw’s debt in April and resumed financing ports, bridges and roads in the country.
“With Co-operative Bank, we want to provide financial services to companies that enter Myanmar, where substantial domestic demand growth is expected with its growing population and ample natural resources,” Mitsubishi UFJ said.
In September, MasterCard Inc. agreed to allow Co-operative Bank to issue credit cards under its famous brand and to enable merchants to accept them for payment purposes.
Mitsubishi UFJ is also expanding elsewhere in Southeast Asia, on Thursday announcing a $743 million (¥64.2 billion) investment in VietinBank, Vietnam’s second-biggest publicly traded lender. The Japanese bank agreed to purchase a 20 percent stake from the Vietnamese government to expand retail and international banking in the country.
The International Monetary Fund forecast direct foreign investment into Myanmar will rise 40 percent to a record $3.99 billion in 2012, after President Thein Sein started a democratic process that earlier this year saw opposition leader Aung San Suu Kyi elected to the legislature following years under house arrest.
Fast Retailing Co. and Honda Motor Co. are among the many domestic companies considering establishing manufacturing plants in Myanmar.
BTMU opened an office in Yangon, the commercial center, as long ago as 1954 to act as an agent bank for the Japanese government’s assistance to the country, the lender said Friday.
Sumitomo Mitsui’s main lending unit signed an alliance agreement with Kanbawza Bank Ltd. earlier this year, the first accord of its kind between Japanese and Myanmar banks, the Tokyo-based lender said in a May 22 statement.
Taisei, JGC eye bid
General contractor Taisei Corp. and engineering firm JGC Corp. will join the bidding for a project to construct and operate a new international airport in Myanmar, sources said.
Hanthawaddy International Airport will be built in Bago, a city some 70 km northeast of Yangon, Myanmar’s most populous metropolis, the sources said Thursday.
Scheduled to open around 2017, it is seen becoming the Southeast Asian country’s second hub airport, after Yangon International Airport. Taisei and JGC will team up with a Singaporean company in entering the bidding, according to the sources.
The Japanese-led consortium, as well as French, German, South Korean and Chinese companies, have all cleared preliminary screenings for the tender, which will likely be held next year, the sources said.
Both Japanese and overseas companies have started paying keen attention to Myanmar, as demand for infrastructure construction is expected to soar on the back of its ongoing economic and democratic reform transition.
Meanwhile, a rise in the number of tourists and business passengers using Yangon International Airport has given rise to a project to expand the increasingly congested facility. Myanmar plans to double the airport’s annual handling capacity to 5.5 million passengers from the current 2.7 million in about five years.
Several Japanese companies have expressed their intention to participate in bidding for the project, with the results of preliminary screenings slated to become available early next year, the sources said.