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Trade and Development Bank

Summary Details:

  • iconCountry Name: Mongolia
  • iconS&P Rating: B
  • iconMoody's Rating: B3
  • iconFitch Rating: N/A
  • iconAssets: MNT 5,413,180,316
  • iconProfits: MNT 93,507,164
  • iconOwnership: 65.83% Globull Investment and Development SCA,
    7.32% US Global Investment LLC,
    4.78% Goldman Sachs,
    18.27% Individuals
  • iconDate Modified: Nov-2015

Syndicated Analyses:

Moody's Corporation "Moody's changes ratings outlooks of Mongolia banks to negative and affirms ratings" 08-Jan-2014:
Moody's change in the ratings outlooks to negative reflects the fact that the banks remain vulnerable to a deterioration in asset quality and high borrower concentration against the backdrop of intensifying adverse developments in the operating environment. Given the resource-based nature of the economy and a large lending concentration in mining, there is the risk of boom-bust cycles, resulting in a volatile operating environment.
TDBM's bca of b2 reflects its: (1) solid market position as a leading corporate lender in foreign exchange and trade-related businesses; (2) sound profitability and good operating efficiency; and (3) diversified funding sources from both domestic depositors and foreign financial institutions. However, the ratings are constrained by the bank's vulnerability to a deterioration in asset quality, given its high loan concentration and portfolio of corporate loans. TDBM's top 20 group borrower exposures were equivalent to 42% of its total loans at end-September 2013. More than 50% of these borrowers are also in risky sectors, such as mining and construction. The latter accounted for 17.2% and 16.2% of its total loans, respectively at end-September 2013. TDBM's bca of b2 also reflects potential challenges related to corporate governance that could arise from its narrow shareholding structure.
Wikileaks Public Library of US Diplomacy "Shadowy Buyers Near Purchase Of Largest Mongolian Bank" 22-Dec-2006:
There are major concerns about the impending sale of Trade and Development Bank (TDB), Mongolia's largest bank overall and the key bank for foreign exchange and foreign transactions, to a shadowy 100% Mongolian-owned consortium with unknown financing. The IFC and the ADB, which are minority shareholders, plan to sell their shares, fearing a risk to their institutional reputations. The foreign management firm currently running TDB in accordance with international standards may also leave after the sale. The central bank has the power to halt the transaction but, considering its generally poor regulation of other banks, there are serious questions about its will to do this or to ensure that after a sale TDB would continue to meet international standards.
Trade and Development Bank is the key Mongolian financial institution servicing international accounts and transactions, holding nearly 70% of Mongolia's dollar and foreign currency deposits. The bank currently nets US$10 million in annual profit, which is a 25% return on its US$40 million in shareholder equity. TDB is currently owned by a consortium led by U.S.-based metals trader Gerald's Metals of Stamford, Connecticut, which owns 64%. The Asian Development Bank (ADB) and the International Finance Corporation (IFC) each own 7.5%. The remaining 21% is owned by identifiable Mongolian private citizens.
The ADB and IFC only invested in TDB following an extensive review process that certified the bank's financial stability and commitment to following the best international practices for transparency and accountability. TDB is run for the owners by a management team from the Netherlands-based ING Financial Institutions.
Khan Bank complained to post about the sale, noting that it could neither identify the buyers nor the source of their funds.
The ADB shareholder representative confirmed that the bank is being purchased by a consortium led by Capitron Bank and Ulaanbaatar Bank.

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