Japan's top three banks are racing to open branches in Myanmar as investments in the country by Japanese companies are increasing on the back of its booming economy.
Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui Banking Corp. and Mizuho Bank applied to the Myanmar government for banking licenses last month.
Encouraged by a government policy change allowing a limited number of foreign banks to operate in the country, the core banking units of Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. joined rival banks from China, Singapore and other countries in seeking licenses.
Myanmar is emerging as "an extremely promising market" in Asia, a senior executive of a major Japanese bank said.
Myanmar's military rulers gave way to a nominally civilian government in 2011, opening the resource-rich country to foreign investors and boosting its nominal gross domestic product fivefold over the last decade.
A number of companies see Myanmar as the next market to aggressively invest in, shifting their focus from Thailand where political risk is growing and labor costs are rising.
Around 25 banks have already applied for licenses. Approval is set to be granted to up to 10 banks by the end of September, with industry observers expecting one or two Japanese banks to receive licenses.
Japanese banks have been offering services in the country through tie-ups with local banks.