Banking
From The Report: Mongolia 2015
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While early 2014 was a time of considerable uncertainty for the banking sector in Mongolia, the year turned out to be much better than expected. No banks failed or faced runs, and the institution that generated the greatest concern – Golomt Bank – fared well in the end. Questions about asset quality persist, and corporate governance may not yet be where it should be. However, with Golomt Bank looking increasing sound, sentiment has turned hopeful. Despite challenges, the sector continues to have good long-term potential as Mongolia’s considerable natural resources and stability promise to continue attracting international investor interest as soon as commodity prices recover.

This chapter contains an interview with N. Zoljargal, Governor, Bank of Mongolia; and a roundtable with G. Ganbold, Former CEO, Golomt Bank; Norihiko Kato, CEO, Khan Bank; D. Batsaikhan, CEO, State Bank; Randolph Koppa, President, Trade and Development Bank; and M. Bold, CEO, XacBank and President, Mongolia Bankers Association.

Articles from this Chapter

Analysis

Under pressure: Several factors have prompted concerns about the sector, but there are signs of improvement
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Banks in Mongolia saw weaker profits in 2015 as one of Asia’s fastest growing economies cools, triggering higher borrowing costs and an increase in non-performing loans (NPLs), while credit rating agencies are also watching the banks’ vulnerability to China's continued economic slowdown. Recent downgrades in Mongolia's sovereign credit rating following falls in commodity prices have added more pressure by increasing the cost of borrowing in overseas markets. The devaluation of the tugrik, which…

Interview

N. Zoljargal, Governor, Bank of Mongolia (BOM)
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Interview: N. Zoljargal What is the importance of attracting increased foreign investment? How has balance of payments (BoP) pressure impacted economic stability? N. ZOLJARGAL: The economy of Mongolia has landed softly and adjusted well during a severe BoP shock in 2013-14. Over the past five years, 88% of exports have consisted of mineral commodities and 80% of foreign direct investment (FDI) flows have been into the volatile mining sector. Thus, the economy has been heavily dependent on extractive…

Overview

OBG talks to G. Ganbold, Former CEO, Golomt Bank; Norihiko Kato, CEO, Khan Bank; D. Batsaikhan, CEO, State Bank; Randolph Koppa, President,
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Interview:G. Ganbold,Norihiko Kato ,D. Batsaikhan,Randolph Koppa What challenges does Mongolia’s economic slowdown pose for the banking sector? Where are there opportunities for growth? M. BOLD: Downturns are not a new occurrence for Mongolia or its banks. For the past few decades we have been a small, open economy prone to external shocks and market fluctuations. Growth is cyclical, especially given our reliance on commodities. As such, the recent slowdown is best viewed as…

Analysis

Mongolian banks’ strong track record in reaching residents in remote areas
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In some ways, Mongolia can be considered “well-banked” in terms of banking access. It has one of the highest branch per capita ratios in the world. At 69 per 100,000 (according to World Bank 2012 numbers), it has far more banking outlets for each inhabitant than its peers and neighbours: South Korea is at 18; China, 8; and Russia, 38. Additionally, over 80% of Mongolians have bank accounts. In other ways, however, there is poor access to banking. Mongolia’s branch per sq km ratio is very low,…