Development Bank of Mongolia

Almost certain likelihood of government support. Critical policy banking role, especially for large infrastructure development projects. Pressure on asset quality due to high concentration risk and policy banking role. Very weak capitalization. The negative outlook on Development Bank of Mongolia (DBM) reflects the outlook on the sovereign rating on Mongolia (B+/Negative/B). The negative outlook on Mongolia reflects the possibility that we could lower our rating on the sovereign in the next 12 months if the government's Comprehensive Macroeconomic Adjustment Plan (CMAP) does not induce much-needed foreign direct investments, the country's external liquidity continues to weaken, or the government debt burden rises. We could downgrade DBM if we lower the sovereign rating. We could also lower the ratings on DBM if

...Very weak capitalization. Outlook: Negative The negative outlook on Development Bank of Mongolia (DBM) reflects the outlook on the sovereign rating on Mongolia (B+/Negative/B). The negative outlook on Mongolia reflects the possibility that we could lower our rating on the sovereign in the next 12 months if the government's Comprehensive Macroeconomic Adjustment Plan (CMAP) does not induce much-needed foreign direct investments, the country's external liquidity continues to weaken, or the government debt burden rises. We could downgrade DBM if we lower the sovereign rating. We could also lower the ratings on DBM if the sovereign's willingness or ability to support the bank declines, which we view as unlikely, given the bank's critical role in financing Mongolia's infrastructure development. We could revise the outlook on DBM to stable if we take a similar action on the sovereign. We may revise our outlook on Mongolia to stable if the government can realize the nation's substantial mineral...

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