Trade and Development Bank JSC

TDB's profitability will likely moderate from its high level in 2022. This is as the benefit of some provisioning reversals fades. Net interest margin should contract amid high competition in the domestic banking system and the bank's resumption of interest payment on current account and demand deposits (suspended temporarily during COVID-19). The stable rating outlook on TDB reflects our view that the bank is likely to maintain its established market presence and current capitalization over the next 12-18 months. We believe the bank's enhanced capital buffer can support higher credit growth over the period. The bank will likely benefit from the country's continuing economic recovery following China's border reopening. The outlook on TDB also reflects the outlook on the sovereign

...Trade and Development Bank JSC (TDB)'s increased capital buffer will support higher credit growth. We anticipate a pickup in the bank's loan growth over the next 12-18 months, following a contraction of about 10% in 2022. This is as the country's economic recovery gains momentum with a rise in exports after border reopening of China. The bank has strengthened its capital buffer after raising Mongolian tugrik (MNT) 83.5 billion via a public listing in May 2023. TDB's profitability will likely moderate from its high level in 2022. This is as the benefit of some provisioning reversals fades. Net interest margin should contract amid high competition in the domestic banking system and the bank's resumption of interest payment on current account and demand deposits (suspended temporarily during COVID-19). TDB's material exposure to cyclical corporate sectors poses inherent credit risks. The bank has significant exposure to the mining, wholesale and retail trading, and construction industries....

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