BANKING SECTOR REVIEW: first half of year 2023

“Closing the stable door after the horse has bolted”

The performance of the banking sector has been stable, with steady improvements.  Banks’ total active increased by 11% compared to the same period last year. Customers depended on payday loans and deposit-secured loans the most. Loans to the mining sector and trade sector decreased while loans to the service sector increased. With inflation growth stagnating and the domestic currency appreciating, returns on MNT deposits have caught up with returns on foreign currency deposits.

Due to the importance of trust between customers and for the sustainable development of the banking sector, the Mongolian Bankers Association established the “Codex of Banking Services” to protect customer rights.

Economic growth in the first half of the year improved by 6.4%. From the beginning of the year, improvements in the mining sector, followed by the quick recovery of the transportation industry had a significant impact on economic growth. On the other hand, the agriculture sector suffered due to unfavorable weather conditions, while other sectors experienced slower but gradual growth. Though the foreign currency reserves increased by 23% compared to the previous year, it is insufficient that it is equivalent to 4.5 months’ worth of imports. As a result, the rising real value of the MNT is impairing Mongolia’s competitive capabilities.

Even if the economy is recovering well, without creating an environment that can nurture the growth of sectors other than mining, it may still be vulnerable to volatile fluctuations, as the saying goes, “Closing the stable door after the horse has bolted.“


  • Banks’ loans provided to individuals have increased. Business loans are recovering.
  • Non-performing loans are decreasing gradually.
  • The banking sector is establishing a unified standard to safeguard customer rights.
  • Performance of the 5 banks of systemic importance have been relatively good.
  • Banks of systemic importance have each successfully commenced their IPOs, raising a total of MNT 447 billion.
  • MNT deposits have overtaken foreign currency deposits.

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

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