Orkhon Onon, CEO, TRADE AND DEVELOPMENT BANK (TDB)
Could you introduce TDB to our international audience?
TDB is the longest-serving commercial bank in the country. We are the largest corporate bank (accounting for 40% of total corporate loans in the banking sector) and the leading international bank in Mongolia’s banking industry. We work with more than 300 international banks and financial institutions on payment, settlement, trade finance, and others. TDB handles 32% of Mongolia’s international remittance and 27% of trade finance transactions. How has TDB performed in 2023?
Supported by the economic recovery led by mining and transportation sectors, net loan portfolio, and total deposits by customers of major banks have shown steady growth year-to-date. TDB experienced an increase in net profits 2023 compared to the previous years. Can you tell us more about the bank’s presence and strategy in the mining sector?
We provided a US$60 million term loan to Steppe Gold to partially fund the construction and completion of the Phase 2 Expansion of the ATO Gold mine in the Dornod province of Mongolia. The project uses environmentally friendly heap-leaching and flotation methods for extraction. This sets this project apart from other gold projects in the country. We have been working with mining companies since the mid-nineties, financing alluvial gold mining in the country, now we are looking more at hard-rock gold mines that require more capital and provide a long-term perspective in terms of reserves and returns. What are your priorities moving forward?
Our bank stands committed to a strategic vision that combines ambitious growth with a responsible and sustainable approach to banking. Our key priorities moving forward are digital transformation, as a newly listed company we are exploring opportunities for dual listing our stocks on international markets, and expansion into SME and retail banking business, while maintaining profitability and asset quality.
Norihiko Kato, CEO, GOLOMT BANK
Could you introduce Golomt Bank and its performance in recent years?
Golomt Bank is the third-largest commercial bank in Mongolia in total assets. Established in 1995, Golomt Bank grew mainly as a corporate bank, but in the last six years, we have diversified our business portfolio well across corporate, SME, retail and mortgages. As Mongolia’s economy went through a deep recession in 2016, the country reverted to an IMF bailout that came with a lot of policy requirements. In 2017, an asset quality review (AQR) by the Bank of Mongolia identified problem loans that were not properly addressed. It took us almost five years to solve the problem assets issue and achieve a comprehensive balance sheet cleanup. We returned to profitability in 2022 and completed IPO on the Mongolian Stock Exchange. We started 2023 with robust capital and we are now ready to fulfill our growth story as one of the country's largest banks. What is the ability of Mongolia’s banking sector to finance large developments in mining, infrastructure, and energy?
The financial capacity of Mongolia’s local commercial banks has improved significantly in recent years, but the size of each bank is still relatively small to serve large-scale projects which are usually better suited for foreign investors. Our banks can contribute more by financing the local supply chain and supporting local players to meet the requirements of their customers. What are the main priorities at Golomt Bank for 2024?
One priority is digitalization. Golomt Bank is a leader in bringing new digital products, especially in the consumer and micro-SME space. Secondly, sustainability is another important priority on our agenda. We want to increase our green finance loans and develop stronger ESG risk management and practices. Our target is to increase our green loan portfolio to 5% by 2025 and to 10% by 2030. Today, it is at around 2% of the total portfolio. Finally, another area of focus is accountability as a listed company, not only in communicating with the market but also in promoting sustainability.