BNM issues licences to 5 foreign banks

The five are BNP Paribas, Mizuho Corporate Bank and Sumitomo Mitsui Banking Corp, Bank Mandiri and National Bank of Abu Dhabi
 
Malaysia yesterday awarded commercial banking licences to five foreign banks, including two from Japan, in a move to further open up the sector and draw investments.

The five are France's BNP Paribas SA, Japan's Mizuho Corporate Bank and Sumitomo Mitsui Banking Corp, Indonesia's PT Bank Mandiri and the United Arab Emirates (UAE)'s National Bank of Abu Dhabi.

"The new commercial banks are expected to add to the diversity of the financial services industry, support the new areas of growth, including green technology, and facilitate the transformation of the Malaysian economy towards achieving high value-added and high income economy status," Bank Negara Malaysia (BNM) said in a statement late yesterday.

They will also help enhance Malaysia's international linkages by facilitating international trade and investment flows, it added.
Analysts said it was widely expected that an Indonesian and Middle Eastern bank would be granted licences, but surprising that as many as two Japanese lenders were also approved. Some had also expected Singapore's DBS Bank to be on that list.

The two Japanese banks have already been operating in Malaysia, but on a small scale. National Bank of Abu Dhabi is the second largest bank in the UAE, while French banking giant BNP Paribas has been trying to grow its Islamic finance business.

BNM said that in assessing the applications, it took into account the banks' financial strength, track record, expertise, business plan and potential contribution towards the development of the sector.

The central bank first announced plans to liberalise the financial sector in April last year. Since then, it issued licences to Industrial and Commercial Bank of China in November last year and to India's Bank of Baroda in April this year.

It is expected to award another two banking licences to mega-Islamic foreign banks, as well as two takaful licences, before year-end.

Malaysia has over the years issued 19 licences for commercial banking, and three for Islamic banking, to foreign operators.

"I don't expect the new players to have a big impact on our local banks as they're all - apart from Bank Mandiri - in niche segments," a banking analyst from a local brokerage said, declining to be named.


By Adeline Paul Raj
Business Times