Reuters agency informed that the Mongolian Government is to bailout 500 million US$ for its commercial banks. The Bank of Mongolia made and official statement regarding this information.
“Reuters agency interviewed MP O.Chuluunbat, a former President of Mongol Bank, on October 28 2008. In the interview it said that the Mongolian Government is to bailout 500 million US$ for its commercial banks. It is not the position of the Central Bank and the Mongolian Government, but it is individual’s opinion. There is no need and reason of saving banking sector to bailout such a big amount, which was stated in the interview, for Mongolia. Banking system of Mongolia didn’t weakened its active by buying out of mortgage loan products like in USA and it has not big size loan from the foreign market or economy and it has no urgent payment obligation to pay back. The Banking system of Mongolia is accredited broker of financial sector mainly based on its domestic savings resources and funded realistic projects and consumption.
The Banking sector indicators, such as insecure loan size is 3.9% in banking sector; profit of bank sector reached 49.5 billion MNT in year 2008; bank loan size increased by 46% and reached 2716 billion MNT this year; total active of banking sector is 3961 billion MNT, ratio of banking sectors capital against risky active is 14% (world average is 8%), long term housing loan size is 8.5% in total loan of banking sector and its quality is good, can show that the Mongolian banking sector is at the sufficient level according to the quantity and quality index.
The Central Bank is closely observing the foreign financial market situation, influence, developments.”