YOMA Bank (Branch Visit Report)

OVERVIEW of Branch Visits (Day 1)

Branches :Myanmar Plaza Branch / Yankin Branch / Yangon Main Branch

Purpose :To have a better understanding of the Branches’ sales processes
and positioning of these Branches through digital transformation of
Yoma

Date :26th Aug 2019

Topics Covered :Daily sales planning & procedures/ Sales incentives/Sales Lead
Generation/ Scope of products at Branch Level

Background information on the branches visited

Myanmar Plaza Branch: We visited Myanmar Plaza branch at 9:00 am and the
discussion lasted for one and a half hour. Myanmar Plaza Branch is one of the busiest
branches in Yangon as it is located near many Foreign and Local businesses and one
of the fastest growing commercial centers of Yangon. Based on our observation, the
branch is operating in a relatively small office area where they have used up all the
spaces for Customer services. Please refer to the photos attached at the end of report.

Yangon Main Branch: We visited Yangon Main Branch at 11:30 am. This is a relatively
large branch located in the downtown area of Yangon. They have a big client portfolio
as being the main branch. Branches have bigger seating areas compared to the other
two branches.

Yankin Branch: We visited Yankin Branch at 2:00 pm. This is also located in the same
township as Myanmar Plaza Branch, their office building is smaller than Myanmar Plaza
branch and located near the residential area where their day-to-day walk in customers
are retired government officers who contribute monthly pensions to their savings.

Summary of discussion points with the Branch Managers

Depending on the size and location of the branches, there are on average 4-8 sales
reps (Inbound & Outbound teams) headed by each product line specialists. At branch
level, the primary focus is on (i) SME Loan, (ii) Home loan, (iii )low cost deposits (iv)
Call deposits & JZu accounts(v) Smart Mobile Users (vi) Hire-purchase (vii) Agriculture
Trade Finances

SME Loan: Branch Manager normally set weekly targets for new businesses and more
lending opportunities for current SME clients. Average Monthly targets for these SME
loans at branch level are at 500 mil kyats and at regional level 5 bil kyats.
YOMA Bank (Branch Visit Report)

The outbound sales of the branches target new clients through either referrals from
existing clients or through phone-calls and emailing. One limitation is that SME
specialist together with the branch manager normally gets involved with the SME loan
processes. As a result, the branch manager can go with outbound team on average
only 2 times a week.

Sales leads are also provided by both Regional and head-office team. There is no
regional limitation for the branches when it comes to sales calls. For example, a
regional manager may identify potential leads outside of Yangon. He does not need to
refer the case to nearby local branch. Instead, he and his team will go and get that deal.
Regional managers, branch managers and sales-teams are all collaborating as a team
to meet the sales target which also comes with incentives plan for them.

Home Loan: Yankin branch and Myanmar Plaza Branches focused on home loans
opportunities as there are located in the faster growing residential areas. Marketing
plans for home-loans include monthly sales events at different venues with targeted
sales volumes. Regional target for Home Loan sales is on average 2 bil kyats for a
month.

Low Cost Deposits: Low cost deposits products are like Smart Mobile banking. As
Yoma do not provide record-keeping passports anymore, they find it more efficient way
to cross sell their deposits products which can be opened at 10,000 kyats and can
provide access mobile banking in less than 15 minutes. Customers simply need to fill
out a one-page form and can apply for Smart account, Debit card, online banking,
mobile banking, JZU account, smart linked with wave money in less than 15 minutes.
Direct to teller approach which does not require filling out deposit/withdrawal slip (AYA
& KBZ still asks the customers to fill out these slips before receiving token from queuing
machine) makes the whole transaction process faster than other banks.

New Business Acquisition strategies: Yoma has shifted its focus to be more on these
low-cost deposits. New Businesses Acquisition for this product can be as high as 800
new accounts per month. Regional sales-target for this can vary from 18,000 to 40,000
and count only the savings amount that exceeds 20,000 kyats on new account
openings.

The main driver for this line of products is the increasing demands on the lending side
and ease of opening new accounts on digital platform. Yoma’s clients have become
familiar with the latest Smart Mobile app product even though some clients in
underdeveloped regions of countries may still need time to get used to with the
transition.

Call Deposits & JZu accounts: Outbound sales primarily target commercially
populated areas and industrial zones for these products. Yoma’s call deposits are
YOMA Bank (Branch Visit Report)

offered at 6% APR (KBZ offer at 2% APR) which draw a lot of attention from both
existing and new clients. Businesses man would bring in their cash on Friday and make
withdrawal on Monday or Tuesday to enjoy the weekends accrual interest.

JZu accounts also gained popularity as this is offered at 3% APR and middle incomer
will save a portion of their monthly savings in this JZu account and enter prize-money
lottery system which is done monthly. JZu accounts can be opened with a minimum
cash deposit of 100,000 kyats.

Smart Mobile users: There are Smart Payroll and Smart Salary Advance to increase
the users’ interests in using Smart Platform. Volumes of transactions done on Smart
Mobile App are monitored by Yoma and after some period, it may begin to offer some
credit loans at 16% APR for the customers that can be applied for and approved within
24 hours. The principal and interest will be deducted from the salary payment that
comes into the account at the end of the month.

Hire Purchase: Hire Purchase Digital Platform allows clients to apply for Hire-purchase
loans online which shorten the application time significantly. Branch teams do not get
involved much with this line of product as this is handled primarily by the head office
sales teams.

Agriculture Finance: This is done through partnership with local MFIs to offer low-cost
loan products to farmers and also small business owners. This is also done by Head
Office sales teams.

Sales Training & Incentives: Each sales specialist must complete “Sales Ninja”
Training programs to be qualified sales persons. The program focuses on key areas
such as Mindset, Relationship Building, Empathy and etc. Each branch has to complete
periodically know-your product online short courses to keep the employees stay
updated with the products.

Both Inbound & Outbound Sales team have monthly targets and upon meeting targets,
they are rewarded attractive incentives at the end of the month. Year End bonuses are
also given based on the overall branch performance and also on individual
performance. Year End bonus can be as high as 3 month worth of salary. Sales-
incentives specialist team from Yoma Head Office from time to time tailors the programs
to be in line with the corporate vision and objectives. Branch managers are expected to
lead and execute sales plan more effectively in the near future as some of the back-
office jobs are transferred back to the head-office.

Head office Support: Head office has expert marketing and sales specialists to
analyze data from branches by studying demographics across different townships and
generate leads as many as possible that are deployed to branches to follow-up with the
YOMA Bank (Branch Visit Report)

sales calls. Meanwhile, Head office sales teams have their targeted customers such as
Business Owners/Hire Purchase/ Microfinance institutions.

Limitations observed in branches: Crammed space for the clients during busy hours
between 11:00 and 2:30. We don’t see space big enough for Prudential desks to station
there unless we share the desk with their sales reps. After seeing the sales-desks
shared from Prudential Cambodia, branch managers reacted that it will be very difficult
have these desks in our office due to the space limitations.

Limited Product scope at branches: Except for the low-cost simple deposit products,
other products especially SME , Home Loans and other products similar in nature
require Branch Manager’s presence at client’s location to perform financial and non-
financial inspections before opening a loan case. This undermines the efficiency of the
operations. Product line specialists should be trained and challenged to increase their
involvement with the sales and reduce the involvement of Branch managers. This will
ultimately drive the sales process to proceed much quicker.

Other Information: Yoma Bank has more than 3,000 employees and more than 50%
are female employees.

Current Insurance Partners for Home-loan and Hire-purchase partners are First
National Insurance & Grand Guardian Insurance. However, they only cover the assets
not the inherent credit risks of the loans repayment capabilities of the clients

For Hire Purchase, the premium rate ranges between 1% to 1.3% on the sum-
insured.

For Home Loan, this ranges between 0.28% to 3% depending on the type of the
buildings.

For SME, the branch target is on average 5,000 lakh and the premium rate for a
residential with compulsory add-on covers would cost about 0.7% of that target.

Loan Repayment: Yoma has a very robust and high standard credit risks which result
in Non-Performance-Loan rate standing at 4%. Central Bank Myanmar’s guidelines on
NPL rate is 5%. KBZ banks have NPL rate between 40-50%. They also take strict
guidelines from International Finance Corporation for the loans businesses.

Business Centers: Yoma launched its Business Centers, one in Yangon and another
one in Mandalay to provide a full range of services to customers who have difficulties
commuting to the branches.

Outbound Sales contribute to 75% of the total business portfolio while inbound sales
contribute 25% to the portfolio.
YOMA Bank (Branch Visit Report)

During our conversation with the Bancassurance Manager from Yoma and Senior
manager of performance management

(i) the board want to see how committed we are to this partnership, how
Prudential see Yoma not just as a bank partner, but as a partner to the whole
Yoma group with a focused presentation on helping Yoma grow their entire
group businesses as Insurance Partner.
(ii) They want to see our strategic marketing plan in the upcoming business plan
presentation too.
(iii) Our overall experience with the branch visits seems positive. We opened our
accounts with Yoma and have the Smart apps installed on our phones. The
whole process took only 15 minutes to get the accounts opened, get our ATM
cards ready and the applications ready to use on our phones.

Myanmar Plaza Branch

YOMA Bank (Branch Visit Report)

Inside Myanmar Plaza Branch (Customer Service)

Yangon Main Branch Sales Weekly Dashboard

YOMA Bank (Branch Visit Report)

Yangon Main Branch Sales Weekly Dashboard

Inside Yangon Main Branch (Customer Service)

YOMA Bank (Branch Visit Report)

Main Branch Customer Wait Area

Direct to Teller Queuing Machine