Banking
Competition Review
Quarter Ⅱ,
2019
◊ Banking sector news
◊ Key indicators
◊ Featured: Mining sector loans
◊ Total assets, loans, deposit and profit
of 13 commercial banks
Economic Policy and Competitiveness Research Center
BANKING COMPETITION REVIEW 2019 – Ⅱ Quarter
www.ecrc.mn www.aimagindex.mn www.facebook.com/ecrcmn www.twitter.com/ursulduhchadvar 2
Banking system news in Mongolia
04.08 – The Bank of Mongolia introduced a decision
to shut down Capital bank. mongolbank.mn
04.09 – TDB introduced high-level “Lounge Key”
service in order to satisfy demand of its Visa Platinum
and Golden credit card users. tdbm.mn
04.19 – The Bank of Mongolia organized the
"Economic Policy Forum 2019" in conjunction with
the 95th anniversary of the Mongolian banking sector
establishment, under the theme of "Financial Sector
Development: Past, Present and Future".
mongolbank.mn
04.25 – The establishment of Green Investment
Principles (GIP) and its signatories were announced
during the Belt and Road Forum for International
Cooperation. TDB announced that it has become a
signatory of the GIP among 26 other global
institutions from 12 countries. tdbm.mn
05.08 – XacBank and its holding company TenGer
Financial Group announced today that the Board of
Directors had unanimously appointed Tsevegjav
Gumenjav as the next Chief Executive Officer of the
organizations. xacbank.mn
05.09 – UB City Bank introduced an improved and
modernized series of International Visa Card to the
customers. ubcbank.mn
05.23 – The Board of Directors of Golomt Bank
appointed Mr. Norihiko Kato as the Bank’s new Chief
Executive Officer. mongolbank.mn
06.05 – Khan Bank launched the I Am a Child of the
Green Earth project with International Children's
Complex Nairamdal. The camp receives almost
40,000 children annually and this project will help all
of those children to learn about Mongolian culture
and history, to know about the many species of plants
and animals in Mongolia and to promote sustainable
development. khanbank.com
06.10 – TDB signed a memorandum of
understanding with "My Club" NGO. During the last
four years, the staff of TDB participated in planting
and irrigation of over 45,000 trees. tdbm.mn
06.11 – If you buy a gasoline from the “Shunkhlai”
LLC by TDB card, you can get 3% discount.
tdbm.mn
06.12 – The Bank of Mongolia granted a permission
to payment card processor for “360 finance” Non-
banking financial institution. mongolbank.mn
06.16 – Golomt bank introduced “The Color” card
(newly designed and advanced NFC technology) for
youth (14-22 years old). golomtbank.com
06.18 – People with Candy payment card can
withdraw its candy as a cash from ATM (Xacbank).
xacbank.mn
06.19 – The Monetary Policy Committee meeting
was held and it was decided to keep the Policy rate
unchanged at 11 percent. mongolbank.mn
06.24 – In the 8th annual “Global Financial Inclusion
2019” awards ceremony, the Bank of Mongolia
received the "CYFI Best Collaborator 2019” award for
the successful implementation of its “National
Program for Financial Literacy”. mongolbank.mn
Economic Policy and Competitiveness Research Center
BANKING COMPETITION REVIEW 2019 – Ⅱ Quarter
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Key indicators of banking sector1
1 Source: Central Bank of Mongolia
Total assets = MNT 34.7 trillion
Total assets of banking sector increased to MNT
34.7 trillion as of Q2, 2019, MNT 1.2 trillion (+3.5%)
higher than the previous quarter, and MNT 4.5 trillion
(+15%) higher than Q2, 2018.
Loss = MNT -98.8 billion
Bank capital has reached MNT 3.1 trillion as of Q2,
2019 which is MNT 0.08 trillion lower than Q2,
2018. Banking sector’s loss reached MNT -98.8
billion as of Q2, 2019.
Bank reserve = MNT 4.4 trillion
Bank reserve reached MNT 4.4 trillion as of Q2,
2019 which is MNT 1.5 trillion (+75%) higher than
the Q2, 2018.
Non-Performing Loans = 11.3%
Total loans (net) reached MNT 16.8 trillion as of Q2,
2019. However, NPL is still high. Total NPL reached
MNT 1.9 trillion which account for 11.3% of the total
domestic loans (net).
3,18 3,103,26 3,35
3,10
32,4 42,2
-96,8
80,8
-98,8
-200
-100
0
100
200
300
400
0
1
2
3
4
2Q'18 3Q'18 4Q'18 1Q'19 2Q'19
BIL
LIO
N M
NT
TR
ILL
ION
MN
T
Bank capital Profit, loss (right)
30,2 3133,1 33,5 34,7
+4,5%
+2,6%
+6,6%
+1,4%
+3,5%
0%
2%
4%
6%
8%
0
10
20
30
40
2Q'18 3Q'18 4Q'18 1Q'19 2Q'19
TR
ILL
ION
MN
T
Assets Growth % (right)
2,9 3,1
4,5 4,4 4,4
0
1
2
3
4
5
2Q'18 3Q'18 4Q'18 1Q'19 2Q'19
TR
ILL
ION
MN
T
Bank reserve
14
,5
15
,3
16
16
,3
16
,8
9,0% 8,8%
11,1% 11,4% 11,3%
0%
4%
8%
12%
0
5
10
15
20
2Q'18 3Q'18 4Q'18 1Q'19 2Q'19
Total domestic loans NPL as of %
Economic Policy and Competitiveness Research Center
BANKING COMPETITION REVIEW 2019 – Ⅱ Quarter
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Mortgage = MNT 4.49 trillion
Total mortgage loan reached MNT 4.49 trillion as
of Q2, 2019. Total mortgages have increased
constantly since the ‘Program on the
Development of Sustainable System of Mortgage
Financing’ was implemented.
Current + Deposit = MNT 18.0 trillion
Total deposit reached MNT 12.5 trillion (16.8%
growth since Q2, 2018) and total current account
reached MNT 5.5 trillion (17.0% growth since Q2,
2018) as of Q2, 2019.
1 USD = 2654 MNT | 1 CNY = 385 MNT
Monthly average of official Foreign Exchange
Rates: USD reached 2654 MNT whereas CNY
reached 385 MNT as of the June 2019. USD to
MNT rose by 222 MNT (+9.1%) and YUAN to MNT
rose by 9 MNT (+2.4%) compared to the same
quarter of the previous year.
Total liabilities = MNT 31.6 trillion
As of Q2, 2019, total liabilities reached MNT 31.6
trillion which is MNT 4.5 trillion (+16.6%) higher
than the same quarter of the previous year.
15,4 15,917,5 17,1
18,0
0
4
8
12
16
20
2Q'18 3Q'18 4Q'18 1Q'19 2Q'19
TR
ILL
ION
MN
T
Current Deposit Total
4,33 4,35 4,43 4,41 4,49
0
1
2
3
4
5
2Q'18 3Q'18 4Q'18 1Q'19 2Q'19
TR
ILL
ION
MN
T
Mortgage
24
63
24
64
25
03
25
64
25
82
26
37
26
50
26
33
26
32
26
35
26
45
26
54
36
6
36
0 36
5 37
1
37
2 38
3
39
0
39
1
39
2
39
2
38
6
38
5300
320
340
360
380
400
2000
2200
2400
2600
2800
3000
USD CNY (right)
27,1 27,929,8 30,2
31,6
+5,0%
+3,0%
+6,8%
+1,2%
+4,7%
0%
2%
4%
6%
8%
0
10
20
30
2Q'18 3Q'18 4Q'18 1Q'19 2Q'19
TR
ILL
ION
MN
T
Total liabilities Growth % (right)
Economic Policy and Competitiveness Research Center
BANKING COMPETITION REVIEW 2019 – Ⅱ Quarter
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Featured: Mining sector loans
Non-performing loans (NPL) in mining sector has been high despite mining sector’s recovery
over last few years. As of 2nd quarter of 2014, total outstanding bank loan in mining sector
reached its historical peak (MNT 1.4 trillion) and NPL and overdue loans were 20% of total
outstanding loan. Unfortunately, 2.5 years later (Q4, 2016) mining sector total outstanding loan
shrank dramatically (decreased to MNT 0.7 trillion) and 78% of total outstanding loan classified
as NPL or overdue loans
Since 2017 (late 2016), commercial banks have begun to grant more loans to mining companies
as the sector overcome crisis. As of 2Q 2019, total outstanding loan of the sector (MNT 1.44)
just surpassed the peak in 2014 and 36.2% of total outstanding loans are NPL and overdue
loans. It is a huge success compared to 2016 but 36.2% is still a very high number.
As of 2Q 2019, loans in MNT are 71% of total outstanding loans with an average interest rate of
16.1% (13.2% for currency loans). Mining loans are issued to 462 individuals and companies.
Weighted average term of loans is 13 months which indicates mining sector loans are mostly
short term loans.
MNT 1,4 trillionMNT 1,44 trillion78,1%
0%
20%
40%
60%
80%
-
400
800
1 200
1 600
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
bill
ion M
NT
Total outstanding loans in mining sector, 2Q 2010 - 2Q 2019
Уул уурхай, олборлолтын салбарын нийт зээлийн үлдэгдэл Чанаргүй болон хугацаа хэтэрсэн зээл % (баруун)Total outstanding loan NPL and overdue loans % (right)
Economic Policy and Competitiveness Research Center
BANKING COMPETITION REVIEW 2019 – Ⅱ Quarter
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Banking system competition
Currently 13 commercial banks are operating in Mongolia.
Khan, TDB, Golomt, Xacbank, State Bank, Ulaanbaatar
City Bank are systematically important banks according to
Bank of Mongolia. These banks account for more than 90
percent of the banking system in terms of assets.
Quarterly financial reports of banks were used in this
report and compared by the following indicators:
Assets
Loan
Current account, Deposit
Profit
The banks were classified as Top 3, Medium 3 and small
banks, depending on their total amount of assets. Capital
bank is not included in this report.
TOTAL ASSETS
BANKS
TOP-3 BANK
>5 trillion MNT Trade and Development Bank
Khan Bank Golomt Bank
MEDIUM-3 BANK
1-5 trillion MNT XacBank
State Bank Ulaanbaatar City Bank
SMALL BANKS
<1 trillion MNT
Chinggis Khan Bank Capitron Bank National Investment Bank Arig Bank Bogd Bank Credit Bank Trans Bank
The figure below ranks the 14 banks, according to total assets under control. The banks were
classified as Top 3, Medium 3 and Small banks. Only Capital bank is not included in this review.
Economic Policy and Competitiveness Research Center
BANKING COMPETITION REVIEW 2019 – Ⅱ Quarter
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Assets
Assets, billion MNT and growth %
Total assets of the 13 commercial banks included in this
review have reached MNT 34.7 trillion. Top-3 banks,
medium-3 banks and small banks account for 69.3%,
22.7% and 8.0% of the sector respectively.
Total assets of top-3, medium 3 and small banks have
risen 16.3%, 13.2% and 44.9% respectively.
Market share, by assets, 2Q'19
Khan bank28.4%
TDB22.2%
Golomt18.7%
Хасbank 9.1%
State bank8.5%
UBCbank5.0%
NIBM - 0.8%Chinggis Khan- 1.6%Capitron - 2.6%Bogd - 0.5%Credit - 0.6%Arig - 0.4%Transbank - 1.5%
7 1
90
8 1
04
5 3
93
20
68
7
7 7
00
9 8
55
6 5
10
24
06
5
7%
22%21%
16%
0%
5%
10%
15%
20%
25%
-
5 000
10 000
15 000
20 000
25 000
30 000
TDB Khanbank Golomt Top-3
Top 3
2Q'18 2Q'19 Growth(right)
1 4
78
2 4
89
2 9
93
6 9
60
1 7
55
2 9
68
3 1
56
7 8
78
19% 19%
5%
13%
0%
10%
20%
30%
-
3 000
6 000
9 000
UBCBank State Bank Xacbank Medium-3
Medium 3
2Q'18 2Q'19 Growth(right)
28
6 4
34
65
2
10
0
17
12
7
30
9
29
3
57
3
89
7
18
5
19
6
13
5
51
4
-
300
600
900
NIBank ChinggisKhan Bank
CapitronBank
Bogd Bank Credit Bank Arig Bank Transbank
Small banks
2Q'18 2Q'19
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Loan
Loan, billion MNT and growth %
Total loans of the 13 commercial banks reached 17.3
trillion MNT as of Q2, 2019. Top-3, medium-3 and
small banks account for 65%, 26.5%, 8.5% of total
loans respectively.
Top-3, medium-3 and small banks increased their
total loans by 16%, 23.9% and 61.1% respectively
compared to Q2, 2018. Overall total loans of these 13
commercial banks increased by 20.9%.
Market share, 2Q'19
Khan bank26.6%
Golomt19.1%
Xacbank11.6%
State bank9.8%
UBCBank5.0%
NIBM - 0.7%Chinggis Khan - 1.8%Capitron - 3.0%Bogd - 0.4%Credit - 0.5%Arig - 0.5%Transbank - 1.7%
TDB19.2%
3 0
83
3 8
02
2 8
00
9 6
85
3 3
21
4 6
04
3 3
07
11
23
2
8%
21%18%
16%
0%
10%
20%
30%
-
4 000
8 000
12 000
TDB Khanbank Golomt Top-3
Top 3
2Q'18 2Q'19 Growth(right)
70
5
1 3
93
1 5
95
3 6
94
87
1
1 6
94
2 0
10
4 5
75
24% 22%
26%
24%
0%
10%
20%
30%
-
1 000
2 000
3 000
4 000
5 000
UBCBank State Bank Xacbank Medium-3
Medium 3
2Q'18 2Q'19 Growth(right)
15
9 23
1 3
23
20
1
61
12
0
12
2
30
4
51
1
72
89
86
29
0
-
100
200
300
400
500
600
NIBank ChinggisKhan Bank
CapitronBank
Bogd Bank CreditBank
Arig Bank Transbank
Small banks
2Q'18 2Q'19
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Current and deposit account
Current and deposit account, billion MNT and growth %
Total current and deposit accounts of the 13 commercial
banks reached 21.1 trillion MNT. Top-3, medium-3 and
small banks account for 69.3%, 23.6%, 7% of total
current and deposit account respectively.
Top-3, medium 3 and small banks increased their
current and deposit accounts by 20%, 18% and 38%
respectively since 2Q, 2018. Total current and deposit
accounts of these 13 commercial banks increased by
21%.
Market share, 2Q'19
TDB 15.5%
Golomt21.8%
UB city bank 4.9%
State bank 10.4%
Xacbank 8.3%
Khan32.1%
NIBM - 0.9%Chinggis Khan- 1.6%Capitron - 3.0%Bogd - 0.2%Credit - 0.3%Arig - 0.4%Transbank - 0.7%
97
9 1 8
07
1 4
47
4 2
32
1 0
47
2 2
07
1 7
51
5 0
04
7%
22% 21%18%
0%
20%
40%
60%
80%
-
1 000
2 000
3 000
4 000
5 000
6 000
UBCBank State Bank Xacbank Medium-3
Medium 3
2Q'18 2Q'19 Growth(right)
3 2
97
5 2
16
3 6
63
12
17
6
3 2
70
6 7
82
4 6
08
14
66
0
-1%
30%26%
20%
-10%
0%
10%
20%
30%
40%
-
4 000
8 000
12 000
16 000
TDB Khanbank Golomt Top-3
Top 3
2Q'18 2Q'19 Growth(right)
19
5
27
4
45
2
38
0
81
38
,1
19
9 3
31
62
5
32
75
81
14
7,4
-
200
400
600
800
NIBank ChinggisKhan Bank
CapitronBank
Bogd Bank CreditBank
Arig Bank Transbank
Small banks
2Q'18 2Q'19
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Profitability
Total net profit of the 13 commercial banks included in this review reached MNT 215 billion (after tax). Big-3 banks’
profit (MNT 200 billion) have increased by 34% or MNT 50 billion compared to Q2, 2018 whereas profit of medium
banks were increased by MNT 17.9 billion compared to Q2, 2018 and reached MNT 15.5 billion. Small banks are
operating with a loss worth MNT 334 million.
Profit and loss by billion MNT and growth %
Sources:
1. Mortgage loan report, June 2019, Bank of Mongolia
2. Key indicators of banking system consolidated balance sheet, June 2019, Bank of Mongolia
3. Monthly foreign exchange rate, June 2019, Bank of Mongolia
4. Quarterly financial report of commercial banks, 2nd quarter of 2019
5. Loan report of banks, June 2019, Bank of Mongolia
( 2
7,6
)
( 1
2,4
)
4,2
0,6
( 0
,8)
( 1
,2)
2,1
( 7
,0)
0,1
5,4
1,5
2,0
( 0
,3)
5,5
( 30,0)
( 20,0)
( 10,0)
-
10,0
NIBank ChinggisKhan Bank
CapitronBank
Bogd Bank CreditBank
Arig Bank Transbank
Small banks
2Q'18 2Q'19
( 5
)
1 2
( 2
)
1
4 1
1
16
( 8)
( 4)
-
4
8
12
16
UBCBank State Bank Xacbank Medium-3
Medium 3
2Q'18 2Q'19
17
25
41
44
6%
-50%
-30%
-10%
10%
-
20
40
60
80
100
TDB Khanbank Golomt Top-3
Top 3
2Q'18 2Q'19 Growth(right)
Top Related