New Malaysian bank to enter Lao financial market
New Malaysian bank to enter Lao financial market
RHB Banking Group, one of the largest financial institutions in Malaysia, plans to open its office in Laos amid improving economic cooperation between the two South East Asian Nations.
The banking group made the announcement last week as it had already received the green light from the Bank of the Lao PDR to open its office to provide services in the country at the end of April, and is hoping to commence operations in the near future, a Malaysian news agency reported.
“RHB Bank Lao Ltd will commence business operations upon receipt of the business registration license from the Ministry of Industry and Commerce of the Lao People's Democratic Republic,” the group said in the statement as quoted in The Bernama.
RHB Banking Group is the fourth largest integrated financial service group in Malaysia. The group offers a number of services including retail banking, business banking, group transaction banking, corporate and investment banking.
RHB Banking Group's decision to enter Lao financial market was made amid improving economic and financial cooperation between the two nations. Malaysia is the sixth largest foreign investor in Laos, creating banking business opportunities.
The banking group is not the first Malaysian bank in Laos. Maybank, one of the top Malaysian banks opened its branch in Vientiane several years ago after learning that there were still opportunities for growth in the Lao banking sector.
A Malaysian firm plans to invest US$5 billion in construction of high speed rail in Savannakhet, which can act as land bridge between Vietnam and Thailand. Another Malaysian firm also received the green light to develop Don Sahong hydropower dam in the southern province of Champassak.
A number of Malaysian firms have also been given the go ahead from the Lao government to develop property such as shopping malls, hotels and a number of entertainment venues.
Increasing Malaysian investment in Laos has created business opportunities for banks so they can provide money transacting and other banking services.
The Bank of the Lao PDR has a policy to promote investment in banking services, hoping that the rising competition among the commercial banking sector will enable business people to access investment loans more easily so as they can expand business, create jobs and income for Lao people.
At present, there are 33 commercial banks in Laos; most of them are foreign banks. The banks are now competing with each other to increase deposit interest rates to boost deposits so they can have enough to loan to customers.
Many banks have lowered their lending interest rates, which is a move economists believe will have a positive impact on Lao economic development.
vientiane times
