HOW IS THE HIGH INTEREST RATE ENVIRONMENT AFFECTING THE PERFORMANCE OF MONGOLIA’S TOP 5 BANKS?

 

According to the financial statements of Mongolia’s Top 5 commercial banks for the first half of 2026, total assets continued to grow, while net profit declined by 10.3% compared to the same period last year.

This decline was primarily driven by the Bank of Mongolia’s policy rate remaining at 12% since March 2025, which increased banks’ funding costs and led to higher financing expenses.

Although Golomt Bank and Trade and Development Bank of Mongolia (TDBM) successfully diversified their funding sources by raising capital from the international capital markets in 2024, the cost of servicing these borrowings increased more rapidly than interest income during 2025–2026, moderating growth in net profits.

At the same time, the banking sector continued to record growth in total assets and interest income, while the non-performing loan (NPL) ratio remained stable at approximately 3–4%, indicating that the sector’s underlying financial fundamentals remain resilient.

UBIM continuously monitors developments in monetary policy, banking sector performance, and capital markets, while advancing macro financial analytics to support evidence based investment decision making.