Best bank: Khan Bank
Khan Bank, Mongolia’s largest bank with a 30% market share, receives the award as the country’s best bank in recognition of its solid growth and the successful completion of its initial public offering.
In April 2023, Khan Bank made history by conducting the largest IPO on the Mongolian stock market, raising $53 million. The bank plans to allocate 35% of the raised funds to digital transformation and 34% to green sustainable programmes, demonstrating its commitment to sustainability.
There has been a 16% year-on-year increase in total assets and a 21% rise in total loans, largely driven by the launch of new digital consumer loans. Khan Bank’s digital platform has reached 1.8 million users, representing 55% of the total population, with the ratio of transactions made through digital channels reaching 99%.
In 2023, Khan Bank introduced 100% digital branches in designated locations, with plans to expand its branches across the country. Growth was also fuelled by the recovery in business momentum after the lifting of China’s border restrictions.
Despite its rapid growth, Khan Bank has maintained a non-performing loan ratio of 5.3%, which is lower than the banking system’s average of 6.4%. If Khan Bank maintains its prudent approach to lending and low appetite for historically high-risk sectors such as construction and mining, this should continue to be the case.
Best digital bank: Khan Bank
Khan Bank invested in online lending, payment processes and digital signatures in 2023.
Its digital platform had 1.8 million users by the end of the year, representing 55% of Mongolia’s population. Around 99% of all transactions conducted by these customers were via digital channels.
Khan Bank saw a 21% increase in lending driven by a rapid rise in online disbursements following the digitalization of its lending process. By December 2023, 28% of all loans were originated online.
The bank has partnered with Lime, a local mobile operator, to link around 2,000 of its customers to the fintech via their mobile phone numbers. The bank has also collaborated with Alipay to enable digital payments for users of 12 international e-wallets, giving a boost to tourism across the country.
Khan Bank also became the first bank in Mongolia to introduce digital signatures for public use, with its Kiosk documents being certified with digital signatures.
Best bank for SMEs: Khan Bank
Khan Bank expanded its services to the small and medium-sized enterprise segment and grew its client base by 24.9% year on year in 2023. Its SME loan portfolio grew by 13.9% to Tug8.89 trillion ($2.61 billion).
The lender expanded its programme dedicated to cooperatives engaged in environmentally friendly cashmere production. It extended loans to 21 cooperatives benefiting 3,200 households.
The bank has also implemented a methodology that uses financial benchmarks in the analysis of SME business loans to streamline its loan application process. Over 40,000 loan applications have been processed using this new method.
Best bank for ESG: Khan Bank
Khan Bank is a leader in Mongolia’s sustainable finance market, having pioneered green bonds in the country and captured a large share of the sustainable lending activity.
In April 2023, it was one of the five banks that control over 90% of Mongolia’s banking assets that listed ahead of a government mandated deadline at the end the year. The 10% sale raised Tug183.4 billion ($53.91 million) and was the largest IPO in the history of the Mongolian stock market. A significant portion of the funds raised were allocated towards the bank’s sustainable programmes (34%) and housing infrastructure investments (31%).
The bank issued Mongolia’s first international green bond in 2023, raising $60 million from large international investors including the International Finance Corporation, the Development Bank of the Netherlands and US responsible investor Microvest. The funds were earmarked for projects in renewable energy, green buildings and climate-smart agriculture.
The bank is also behind Mongolia’s first domestic green bond programme. Valued at $30 million and allowing issues in both tughrik and US dollars the programme aims to broaden the availability of green products in the Mongolian capital market.
With eleven types of green loans available, the bank’s green portfolio accounted for 38.5% of sustainable financing activity in the country.
Best bank for corporate responsibility: Golomt Bank
Last year, Golomt Bank worked on a variety of initiatives to support education, healthcare, cultural heritage and women’s empowerment in Mongolia.
It expanded its charitable activities for children through the Onesky initiative to aid young children living in the Mongolian yurt districts of Ulaanbaatar. The bank designed a fundraising menu in its app to drive online donations.
The bank also supported the Heart Never Forgets project, which was launched to address the scarcity of paediatric heart surgery in Mongolia. The project has already provided life-saving surgery to 600 children and cardiac examinations to 18,000 children.
As part of its efforts to empower female entrepreneurs, the bank introduced the Women Owned trademark, a special certification designed to identify and support businesses owned by women. The bank also updated the terms of its Loan to Support Women Entrepreneurs scheme.
Golomt Bank donated Tug30 million ($8,829) to the traditional Mongolian music orchestra, Morin Khuur Ensemble.
Best bank for corporates: Trade & Development Bank of Mongolia
In 2023, the Trade & Development Bank of Mongolia grew its corporate loan portfolio by 3.3%, to Tug3.3 trillion ($970 million).
It was one of the five banks that control over 90% of Mongolia’s banking assets that listed ahead of a government mandated deadline at the end of 2023. The sale of 6.39% of its stock was fully subscribed within hours of primary market book building. The total orderbook was Tug105.5 billion, an oversubscription of 126.4%.
The bank allocated approximately 50% of the IPO proceeds to its corporate segment. A substantial portion of this was earmarked for green projects, aligning with the bank’s green transformation agenda.
