For a sense of what’s afoot in Mongolian banking, take a look at TransBank.
It started life as Transport and Development Bank with a simple, direct slogan: Your financial partner to accelerate development. Its initial emphasis was the mining, agriculture, construction, transportation and processing sectors, with a focus on small and medium-sized enterprises.
But in August 2021, TransBank took the decisive step to increase its local footprint and move up the rankings: Mongolia’s seventh-largest financial institution merged with Credit Bank, the ninth largest, to become a joint-stock company.
It was something of a first for the $14 billion economy – not the merger itself, but the rationale behind it.
“This was actually the first Mongolian merger not related to the performance of a bank – it’s about growth,” Erkhembayar Baltsukh, TransBank’s deputy CEO, tells Asiamoney.
In other words, this wasn’t a forced marriage demanded by regulators to stop financial bleeding amongst weak institutions.
“Both banks have been performing well,” Baltsukh adds. “We complied with all the regulations and requirements set by the central bank. It's really different than the previous merger instances of commercial banks in the Mongolian banking sector.”
It’s also a sign of financial maturity. The authorities have prodded small and medium-sized banks to adopt more international practices in preparation for closer financial links around the globe.