💰 BANK EARNINGS 2022 | MONGOLIA - UK: 60th ANNIVERSARY | TRANSPORTATION REVENUE

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🤔 DID YOU KNOW?

💰 TOP BANKS IN 2022

Last year, State Bank (SBM), Golomt Bank (GLMT), and XacBank made a total net profit of ₮298.8 billion.

State Bank: Profits x 2.1 

The bank's net profit increased 2.1 times, reaching ₮96.2 billion. The reason - their interest income grew by 5%, with non-interest income also rising by 94%. Among non-interest income components, the revenue from transaction fees increased the most (3.6 times).

• State Bank's current accounts grew by 23.3% to ₮811.7 billion, while deposits and loans decreased by 11.8% and 16.5%, respectively.

Golomt Bank: Strongest growth

Golomt Bank's net profit amounted to ₮100.5 billion, a 4.5-fold increase from the previous year. This was primarily driven by a ₮102.6 billion increase in non-interest income, which included transaction fees and exchange gains.

• As deposits decreased by 18.7%, interest expense on deposits also dropped by 26.8%. However, interest income increased by 16.2% to ₮669.5 billion, thanks to a 10.6% increase in net loans. The bank's equity stood at ₮843.7 billion at the end of 2022, 1.4 times higher than the previous year.

XacBank: Consistent performance

XacBank reported the highest net profit of ₮102.2 billion, a 35.7% YoY growth. This was due to an increase in non-interest income, which reached ₮56.7 billion at the end of the year.

• The bank’s current accounts & deposits rose by 9.4% to ₮2.4 trillion, and net loans amounted to ₮1.99 trillion, of which only 3.9% were non-performing loans.

In conclusion

Mongolia’s banking sector is showing significant growth and development. With all of the five systemically important banks going public this year, the success of the banking sector is likely to accelerate the development of the stock market as well.

📈 DATA STORY

In 2022, freight tonnage saw a significant increase of 23.6% to reach 60.8 million tonnes, despite being down 11.9% from pre-pandemic levels in 2019. However, overall revenue saw a slight increase of 1.7% compared to 2019. The mining industry's resurgence was the primary contributor to last year’s revenue increase, leading to an 89.6% rise in road transport revenue that totaled ₮784.5 billion.

🤝 MONGOLIA - UK: 60th ANNIVERSARY

2022 marks the 60th anniversary since Mongolia established diplomatic relations with Great Britain in 1963. It was the first time Mongolia entered a formal partnership with a Western country.

Partnership

• Foreign trade: In 2017, Mongolia's exports to the UK reached a record high of $660.5 million, but last year they decreased 52 times, dropping to $12.3 million. Imports, on the other hand, increased by 46.4% to $42.9 million in that period. In 2017, Mongolia's main export products to the UK were gold, wool, and cashmere, with gold exports alone totaling over $595 million.

• Bought / sold: Great Britain mainly imports copper concentrate, feldspar, and other minerals, as well as cashmere and wool from Mongolia, while exporting railway parts, cars, food items, and grains.

• Reduced tariffs & investments: In 2021, the UK’s Enhanced Framework Trade Preferences Scheme came into effect which allows Mongolian companies to export certain goods to the UK with zero or reduced tariffs. Additionally, the UK is implementing policies to encourage investment flows between the two countries, including allocating $3 billion in flexible loans for companies interested in investing in Mongolia.

• In the coming years: The UK government has published a guide on exporting goods to Mongolia on its official website, highlighting opportunities in renewable energy, agriculture, and education. With the support of both governments, these sectors are likely to be the first to attract the attention of British business owners and investors.

Politics

Despite not having extensive political ties, Mongolia and the UK have cooperated on regional and international issues such as climate change, human rights, and security.

🏃 QUICK STORIES

📌 Korea Telecom to import rare earth metals from Mongolia. On January 26, KT entered into a strategic partnership agreement with the Mongolian government to import a range of mineral resources, including rare earth elements that are crucial components in the manufacturing of smartphones and electric vehicles.

📌 Financial Regulatory Commission grants Gazar Shim approval for IPO. Founded in 1999, Gazar Shim is Mongolia’s first canned vegetable factory and is now considered one of the leading domestic producers.

📌 Development Bank of Mongolia repurchases $51.6 million worth of Euro bonds launched in 2018. The repurchase is a partial fulfillment of the decision to repay the $500 million bond early in 2022. The outstanding bond balance now stands at $448.4 million.

📌 Sendly NBFI posts net profit of ₮3 billion for 2022. The company granted loans worth ₮22 billion to its customer base that grew by 780% YoY to reach 7,914 individuals. This increase in loan activity led to a 9.2% uptick in interest income, totaling ₮1.6 billion, compared to the previous quarter.

📌 President to veto law on the protection of human rights on social media. The Office of the President will be providing further details on this decision today, January 30. The law in question was first submitted to the Parliament on January 18th and subsequently approved on the 20th.

🟦 TOP NEWS

1. Mongolia moves to seize power to shut down internet, control social media (Poynter)

2. Mongolian government under pressure as its foreign policy options are squeezed by Russia’s invasion of Ukraine (East Asia Forum)

3. Number of Foreign Tourists Tripled (MONTSAME)

4. Mongolia calls on Rio Tinto to keep budget for giant copper mine in check (Reuters)

5. Record-setting champion Hakuho emotional in retirement ceremony (The Japan Times)