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Economic Growth Underpins Mongolian Banks’ Stable Operating Environment www.fitchratings.com
Fitch Ratings-Hong Kong/Seoul-05 October 2023: The operating environment for banks in Mongolia will benefit from strong medium-term economic growth, backed by rising production in mining, Fitch Rating says. Loan growth picked up in 1H23 on improving business conditions and as major banks have complied with IPO requirements that have provided them with higher capital bases to support growth.
We believe appropriate risk controls during periods of rapid growth will be a key differentiating factor for banks’ risk profiles and asset quality. We expect banks to be more disciplined in balancing growth and capitalisation, given the improved regulatory framework in recent years.
We expect banks’ earnings to continue to be supported by healthy economic growth in the medium term, despite strong competition. Banks’ non-performing loan ratios have been gradually improving, due to conducive business conditions and higher loan growth. The 2023 interim results of major banks in Mongolia were steady, with higher net income and lower credit costs offsetting the impact on operating expenses from high inflation and foreign-exchange volatility.
The report “Mongolian Banks Dashboard: October 2023” is available at www.fitchratings.com or by clicking the link in this media release.
Contact:
Savio Fan
Associate Director, Financial Institutions - Banks
+852 2263 9955
Fitch (Hong Kong) Limited
19/F Man Yee Building
68 Des Voeux Road Central
Hong Kong
Heakyu Chang
Senior Director, Financial Institutions - Banks
+822 3278 8363
Published Date:2023-10-05
