06 Nov United Amara Bank promises to protect customer savings

Written by Ko Ko Gyi and Tim McLaughlin Published in Service Read 2870 times
United Amara Bank in Pyay in Bago Region. Photo: UAB

A move by the US Treasury Department on October 31st sent a Myanmar bank into scramble mode this week to prevent customers rushing to their bank to withdraw their savings.

United Amara Bank was quick to convene a press conference in Yangon on November 4 to make a pledge to customers that they would protect their savings and to distance themselves from the move by the US Treasury Department to add the father of the bank’s owner to their blacklist.

United Amara Bank CEO U Than Win Swe told the press conference that the bank will guarantee customers’ savings even though the bank faced a big gap between deposit and withdrawal within just one day because of growing customer concerns.

The nub of concern was a move by the US on October 31 to blacklist former Minister of Industry and a sitting member of parliament, U Aung Thaung of the Union Solidarity and Development Party over claims that he is blocking key reforms in Myanmar.

U Aung Thaung’s son, U Nay Aung, is the majority shareholder of United Amara Bank with a 90 percent stake. Neither U Nay Aung nor the bank were added to the US blacklist.

U Than Win Swe explained the bank’s concern.

“On November 3 customers made a total deposit of K44 billion and total withdrawal of K41 billion. But on November 4, the total savings figure was K16 billion and total withdrawal was K26 billion; so the total for savings was K10 billion less than the total withdrawal,” he said.

“There is an average amount of K4 to K5 billion between total savings and withdrawal in each bank. But today [November 4] there is a gap of K10 billion between savings and withdrawal for the UAB because of customers’ concerns,” U Than Win Swe told Mizzima.  

“The bank can guarantee its liquidity ratios,” he said.

The Central Bank of Myanmar’s foreign exchange management department deputy director general U Win Thaw said that the bank was prepared to intervene if the situation worsened.

“It is normal not only in Myanmar but in other countries that there could be higher concerns among customers under conditions like this. But the Central Bank is ready to take necessary action in accordance with the rules and regulations to protect [the bank] if required.”  

“There isn’t any linkage between UAB and U Aung Thaung. He doesn’t own any shares, [he does not] not influence UAB management processes,” he said, reiterating that neither U Nay Aung nor UAB were added to the sanctions list.

U Win Thaw offered assurance that the Central Bank would publicly release information if the United Amara Bank fell afoul of the law.    

U Than Win Swe said that currently the bank has over K440 billion in savings amount in local and foreign currencies, and has K231 billion in loans.

Asked by Mizzima at the press conference why U Nay Aung was not in attendance, U Than Win Swe said that he is currently overseas.

UAB was established on August 16, 2010 and is currently conducting transactions with 71 international banks in 23 countries including the Middle East, Europe and Asia, according to the press release.

In 2012 the bank established relations with US-based payment service Western Union for inbound remittance. The following year the bank inked deals with both Visa and MasterCard.

MasterCard’s country manager for Thailand and Myanmar, Antonio Corró told Mizzima by email that the companies activities at the bank remained “business as usual,” on November 6.

Representatives from Visa and Western Union did not respond to requests for comment.

Last modified on Thursday, 06 November 2014 13:03