BANKING SECTOR REVIEW: 1st quarter of year 2024


The performance of the banking sector has been relatively stable. Total assets of the banking sector have increased by 17% compared to the same period of the last year. As the recovery of various economic sectors gains momentum, the amount of non-performing loans has started to decrease. The growth of bank loans aimed at supporting economic sectors continues.

Although the balance of payments is in surplus, the increase in imports poses a risk of pressure on foreign exchange reserves. The continuous growth in the export of mining products is boosting budget revenues and creating conditions for maintaining a budget surplus.

In addition to the growth in the mining and transportation sectors, the construction, manufacturing, and service sectors have also experienced growth, significantly contributing to the 7.8% economic expansion. However, severe winter conditions towards the end of the year caused substantial damage to the livestock sector, negatively impacting agriculture. Prices of supply-driven products and services have stabilized, leading to a decrease in the inflation rate.

It is important to remember that while economic indicators are positive, the implementation of numerous unplanned and inefficient projects and programs by the government, like mushrooms after a rain, could limit economic recovery and potentially lead to a downturn.

Key Changes and Future Trends in the Banking Sector in 2024

  • The issuance of loans aimed at supporting citizens and businesses has increased.
  • Non-performing loans of banks has decreased.
  • The financial performance of the five systemically important banks is relatively good.
  • The newly listed banks have distributed dividends equivalent to 483 billion MNT from their 2023 profits.
  • The rise in global commodity prices is the underlying reason for the increase in the prices of essential goods.
  • The increased returns on MNT deposits have significantly contributed to the rise in MNT savings.

Please click HERE to see the full version of the review in ENG.

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