Letter from the Chairperson

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Letter from the Chairperson 2019-2020

2020 has been a challenging year globally. 

As I write this message, Covid-19 continues to have devastating human, economic and social impacts across the globe, forcing governments, businesses, and communities to take drastic measures to protect populations, including lockdowns of various degrees. While its full implications are unclear, there is little doubt that they will be profound and far reaching.

As Myanmar’s largest privately-owned bank, KBZ Bank has been working tirelessly to ensure that critical banking services remain open and available, while keeping our staff and customers safe, and complying with Central Bank of Myanmar (CBM) guidelines and directives. Our Covid-19 Crisis Committee (CCC), which we set up in February, meets daily to review, anticipate, and act on developments. 

Against the backdrop of a global pandemic, we continue to adhere to our values of Metta, Thet Ti, and Virya – loving-kindness, courage and perseverance. Beyond provisions for our staff and customers, we have prioritised lending to critical sectors and support businesses that are essentially viable, but which may not have the resources to withstand a sustained fall in income.

But even as we focus on the current situation, we have kept longer-term goals in sight.  

We have made significant strides towards our twin goals of becoming the world’s best-managed bank, and achieving financial inclusion for all, building on the momentum gained from over three years of transformation and reform. Our mobile e-wallet KBZPay has given millions more the ability to manage their money securely for the first time.

As we strengthen ourselves, we strengthen the financial sector, and the economy as a whole. 

Full Compliance with Regulations

KBZ Bank continued to raise the bar on both risk management and compliance. We fully observe and comply with the Financial Institutions Law, regulations, rules, standards and codes of conduct in all our business functions. As a privately-owned organisation, we are not obligated to publicise our financial results. However, we are fully transparent, and report our qualified audited financial results to the CBM annually.  

Stronger Governance and Risk Management

Sound and robust risk management is a critical pillar of KBZ Bank, and our business decisions reflect a balance between opportunity and risk factors. Over the past 12 months, we have institutionalised further reforms to strengthen corporate governance and risk management, including:

  • Credit Process Transformation

We have transformed several aspects of the Bank’s credit process for improved efficiency, transparency and accountability.

The Bank has instituted that credit approval will fall outside the jurisdiction of the Bank’s shareholders, where an independent Board Credit Committee (BCC) and an Management Committee (MCC) comprising experienced senior executives assumes this responsibility. We have progressively appointed independent directors to sit on this committee. The new Independent Director, U Kyaw Min Htun, joined the Board Credit Committee (BCC) on the 3rd August 2021.


  • Diversification of Portfolio and established limits to manage concentration risk

Asset quality remained a key priority for the Bank. We continued to monitor our portfolio mix and establish limits to manage concentration risk. We measured and set hurdle rates for geographical and industry sector concentration; set limits for single borrowing/financing groups; and established limits for each collateral type.

  • Building Sustainability and Responsible Financing

We also remained committed to building a sustainable future. KBZ Bank is developing a Sustainability Financing Policy, and to date, has enhanced the Bank’s Credit Policy to include the following: 

  • An exclusion list that prohibits the Bank from financing operations that negatively impact the socio-economy or environment. This list includes those suspected of being involved in AML/CTF or activities that contravene the law, including trading in endangered species.
  • The extension of credit to businesses within the Bank’s target markets and business sectors, but never where there is any doubt as to their ethical standards or record.
  • The extension of credit products that match the business needs of our customers and minimises the risk of failure to repay. All credit products are subject to Product Development Document (PDD) approval internally.

Fraud/Risk AML

Our Fraud Risk Target Operating Model and Oracle system-OFSAA are on track for implementation by the first quarter of 2021. These systems will enhance our FRM Governance & Fraud Organisation Structure, Fraud Detection and Monitoring Procedures, Fraud Reporting and Investigation Procedures and our Fraud Training & Awareness Programme, among others. This will further strengthen our ability to identify, report and effectively respond to fraud in a timely manner.

Bank ownership

KBZ Bank is an independent entity that has never been under a holding company structure. While there are other entities in Myanmar bearing the KBZ brand, KBZ Bank is not owned by any other holding company, including the KBZ Group. 

Bringing Digital Banking to Consumers & Businesses

We have made significant progress towards our vision for total financial inclusion for the people of Myanmar. 

Less than two years after its launch, KBZPay powers over 290,000 businesses in Myanmar and enables payments for 5 million consumers. To date, it has facilitated over US$5 billion in transactions, a massive volume for a mobile app serving a developing country. 

The reach and data from this trusted and secure network has enabled us to go beyond digital banking to offering a comprehensive range of digital services that will transform KBZPay into a wider e-commerce ecosystem. We believe this shift will encourage greater connectivity and digitisation of businesses in Myanmar, bringing micro-entrepreneurs online, connecting startups to a wider base of customers, and enabling enterprises to go mobile-first.

Moving forward, we will continue to champion a mobile-first Myanmar, with a goal of 30 million KBZPay customers within ten years.  

COVID-19 Crisis Committee (CCC)

With a 40% share of the country’s commercial banking business and an equal share of deposits, it is essential that our financial services remain open and accessible to our customers at all times. Equally essential are the measures that keep our staff and customers safe. 

To this end, we appointed a Covid-19 Crisis Committee (CCC) in February. The CCC meets daily to ensure all possible measures have been taken to ensure a safe environment for our employees and customers, that there is no, or minimum, degradation of critical functions and services, and that we remain fully compliant with all regulatory requirements. The CCC is equipped to respond quickly, and to develop any necessary escalation and related business continuity plan.  

To further ensure business continuity, our key data centre resources are now split into four separate locations in Yangon. 

All our employees are also covered by a comprehensive health insurance policy, to include coverage for Covid-19. As the crisis escalated, first vulnerable employees, and now 70% of our 18,000 employees work from home, with continuous access to the latest medical knowledge and psychological support. For those who cannot work from home, or who need to meet face-to-face, strict safe distancing protocols are being followed. We also monitor the health status of all our staff daily via the Health Tracker App.

For customers who need to visit a physical branch, information relating to the branches’ opening statuses and the nearest available branch can be found online on the bank’s website. 

At the same time, we are making it easier for customers to access funds without having to go to a branch office, for example with a cash pick-up and delivery facility and ensuring our 1,200 ATMs are always topped up. We have also relaxed our onboarding policies for KBZPay to give more people access to cashless transactions. 

We have also taken significant steps to strengthen and secure our digital services, including by tightening security measures, installing more CCTVs, and implementing a strict schedule of maintenance for our systems servers and cyber security.

Supporting COVID-19 recovery through lending

To help ensure that essential services continue to be available during the pandemic, KBZ Bank is prioritising lending to business sectors that provide such services.  In March 2020, we also launched a COVID-19 Assistance Policy [CAP] Programme that extends additional credit lines or payment holidays to those directly impacted by the economic slowdown resulting from COVID-19. 

Moving forward

Until a Covid-19 vaccine is developed and becomes widely available, we expect the global and local outlooks to remain uncertain. KBZ will continue to respond to the developing situation according to CBM guidelines, and with the wellbeing of our employees and customers top of mind. During this difficult period, our values of Metta, Thet Ti, and Virya, loving-kindness, courage and perseverance, are more important than ever. 

However, as we deal with this developing situation, our priorities will remain constant. We will continue strengthening our bank, with international best practices as a guide, and to pursue total financial inclusion for the Myanmar people. 

KBZPay will remain at the heart of this drive and, we believe, of Myanmar’s emerging digital revolution. We’ve started with digital payments, but will see an ecosystem of mobile technology transform how we live, work, and play by putting everyday services that matter at the fingertips of the people of Myanmar. 

What we have accomplished this year would not have been possible without the strong leadership of our management team, the teamwork and dedication of our employees, and the goodwill of our customers and stakeholders. 

Together, we will continue to lead the charge into Myanmar’s new, digital future.