Japan was the big winner in the foreign banking licence contest, securing three of the nine licences awarded on October 1.A total of 25 foreign banks had entered the race for the licences by July 14.
One winner each comes from Australia, Thailand, China and Malaysia, while Singapore boasted two successful banks and Japan claimed three winners.
The banks now have a year to get their branch up and running.
"Now comes the hard part," said Sean Turnell, a Myanmar-focused economist at Macquarie University.
"How to come up with a viable business plan that will generate profitable return on the minimum capital requirement of US$75 million. It will be tough, especially in the early years."
"This will be a long-term bet for them all," he said.
Mr Turnell also noted that all three Japanese banks that entered - Bank of Tokyo-Mitsubishi, Mizuho Bank and Sumitomo Mitsui - had received a slot.
"So, despite some disappointments in other sectors, Japan's substantial investments in their relationship with Myanmar is now paying dividends," he said.
DBS was one notable omission, as the Singapore-based bank is one of the largest and most influential in the area, with great regional ambitions, he added. Two of the three Singaporean entrants - UOB and OCBC - won preliminary licences.
Edwin Vanderbruggen, senior partner at legal and tax advisors VDB Loi, said there were some surprises among the banking winners and losers. Three South Korean banks - Industrial Bank of Korea, Kookmin Bank and Shinhan Bank - had submitted proposals to the CBM, but none of them had made the cut.
"We were expecting that at least one Korean bank would be able to clinch the licence," he said.
"Similarly, no Vietnam, Taiwan or India bank is in the line-up, which is definitely a pity."
Of the winners, Mr Vanderbruggen said ANZ's strong presence in Asia and ICBC being the only entrant from China likely helped them both, while Bangkok Bank and Maybank both managed to beat out several competitors from their own countries of Thailand and Malaysia.
The winning banks were selected by a tender process from among a shortlist of 25 candidates released on July 14. The shortlist was composed from expressions of interest from the 42 foreign banks with Myanmar representative offices.
Central Bank of Myanmar governor U Kyaw Kyaw Maung said licences were award on the basis of technical skill, service and discipline, capability on their home country and regional footprint.
Assessing how much the banks will contribute to develop the domestic economy was also important.
"After a detailed analysis I am sure these nine banks are perfect for the country," he said. "There are many others we could have chosen, but I hope the winners will assist with developing the economy."
The preliminary approvals are valid for 12 months, during which the banks must prepare to open their branches. They will face restrictions, such as being barred from retail banking, a limit of one branch and not be allowed to lend to local companies.
However, the foreign banks will be able to use both dollars and kyats, according to local media, and will be able to lend to local banks and foreign companies.
After a year the Central Bank will grant the final licences.
KPMG Myanmar managing director Yasuhide Fujii said the winners all have representative offices in the country, so have experience working in Myanmar and understanding the practical difficulties.
"However, they also have great faith in the Myanmar growth story as well as the Myanmar people's ability to overcome these difficulties with some help," he said.
Myanmar is seen as a key market going forward, and could support pan-Asian growth strategies and service existing customers into Myanmar as "a natural extension of their operations within the region," he said.
The banks that lost out on licences will likely have future opportunities to enter the market, through avenues such as joint ventures.
Some local bankers have also opposed the licensing round, claiming it is too much competition too early in their development.
Translation by Aye Thidar Kyaw
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