🏛️ STATE BANK IPO | NBFIs ON MSE | RUSSIANS QUEUEING AT MONGOLIAN BORDER

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🤔 DID YOU KNOW?

🏛️ STATE BANK TO BE LISTED ON MSE

Mongolia’s only government-owned bank, has recently been approved to go public and issue its shares on the Mongolian Stock Exchange (MSE). Let’s dive into it and see what there’s to know about the State Bank, one of the five systemically important banks of Mongolia.

State Bank in a nutshell

Although the bank was founded in 2009 as a 100% state-owned company, its ownership is now divided between the Ministry of Finance and Deposit Insurance Corporation of Mongolia who own 52.25% and 47.75% of the bank’s total shares, respectively.

As of today, the State Bank provides financial services across the whole country, with 495 branches, 350 ATMs and about 5,320 organizations that use its POS machines. The total number of customers has exceeded 2 million, 99% of which are individual clients who account for 70% of the total loans. The State Bank provides most public financial services in Mongolia, processing 90% of children’s money, 55% of pensions and 80% of more than 100 types of welfare benefits.

And financially speaking

Compared to the first half of 2021, the bank’s …

• Total assets have remained the same and currently stand at around ₮3.9 trillion.

• Net loans increased by 11.8% to ₮2.3 trillion, while the ratio of non-performing loans dropped to 8.4%.

• Net profit grew by 125.2%, reaching ₮69.8 billion.

The IPO

The bank is looking to offer 5% of its shares to public and raise ₮22.1 billion in total. The primary offering on the MSE will take place from September 30 to October 6, with a price of ₮590 per share.

More to come

With the State Bank’s IPO, hereby begins the long-awaited series of public offerings of the five systemically important banks required to go public by law. The amendments to the Banking Law adopted last year requires them to be listed on the MSE and to cap a bank shareholder's rights at 20% - it will improve transparency and strengthen the banking system in Mongolia overall.

📈 DATA STORY

As you may have already read from our previous editions, Sendly is going public, becoming the fifth non-banking financial institution (NBFI) listed on the Mongolian Stock Exchange. Their primary offering is starting today and will end on September 30. The company is looking to raise ₮10.05 billion, offering 67 million shares at a price of ₮150 each.

🧳 RUSSIANS QUEUE AT MONGOLIAN BORDER

More than 3,000 Russians, mostly men, have entered Mongolia since last Wednesday, trying to escape the military mobilization announced by President Putin a few days ago. Considering the influx of Russian travelers has significantly increased in the first half of 2022, it may just be a culmination of a trend that has already started at the beginning of the Russia-Ukraine war.

• In the first half of 2022, 36.7 thousand Russians entered Mongolia - more than seven times more compared to the same period last year.

What does it mean for Mongolia?

This might be the first time we’re facing a refugee problem, and, as a small country sandwiched between two giants, Mongolia should be careful on how to approach the issue. The public has no common opinion on how the government should deal with the incoming Russians citizens, but it seems like the high-ranking officials are already taking a stance in favor of fellow Mongols who are trying to flee Russia.

• Buryats, Tuvans and Kalmyks are all ethnic groups native to Mongolia who reside on Russian territories close to the Mongolian border and consequently have Russian citizens. There are 461 thousand Buryats, 183 thousand Kalmyks and 264 thousand Tuvans living in Russia in total.

Former Mongolian President Ts.Elbegdeorj urged Putin to stop the war in a video address on Friday, highlighting that the Buryats, Tuvans and Kalmyks have been used as “nothing more than cannon fodder”.

By the same token, in his address to the 77th UN General Assembly, Mongolia’s current President U.Khurelsukh called for the establishment of “Pax Globalica”, an order where the international community understands each other, cooperates, and manages any conflict through peaceful dialogue.

🏃‍♀️ QUICK STORIES

📌 Trade.mn, Coinhub and iDAX officially registered as virtual asset service providers. The decision was announced today during the 16th regular meeting of the Financial Regulatory Commission. The Law on Virtual Asset Service Providers adopted earlier this year required all crypto exchanges to legally register by September 26, 2022.

📌 Meta to help make education more equitable in Mongolia’s 21 provinces. The Ministry of Education and Science has recently held a meeting with Meta’s representative to discuss the company’s activities in the field of education. The company agreed to organize courses aimed at improving digital education in Mongolia in partnership with the UN.

📌 ADB forecasts Mongolia’s economy to grow 1.7% in 2022. This is much lower than the prediction of the Central Bank of Mongolia, which expects the economy to expand by 2.4% this year. The low forecasts can be explained by the recent problems we’re facing in the mining field that makes up the majority of our export products.

📌 Central Bank of Mongolia increases key policy rate to 12%. The decision was announced last Monday during the meeting of the Monetary Policy committee. The key interest rate previously stood at 10% - the highest point since 2012.

🟦 TOP NEWS

1. Prime Minister attending state funeral of Queen Elizabeth II. (MONTSAME)

2. Mongolia ready for expansion of digital learning. (MONTSAME)

3. Mongolia, Australia Celebrate 50 Years of Diplomatic Relations. (The Diplomat)

4. War in Ukraine and its implications on Mongolia’s economy. (Friedrich Ebert Stiftung)

5. India-Mongolia relations: From ‘spiritual neighbours’ to ‘strategic partners’ and beyond. (The Times of India)