State Bank to submit IPO plans by July

State Bank has expressed intentions to go through an initial public offering (IPO) in compliance with the revised Banking Law.

State Bank has become the fourth bank in Mongolia to accept its new obligation to become a jointstock company, with the Top 5 or systematically influential banks required to become public companies through an IPO in the stock market by June 30, 2022. Previously, Bogd Bank announced in February that it would offer its shares to the public via the Mongolian Stock Exchange, while Khan Bank and XasBank notified that it is undergoing necessary preparation for an IPO launch.

“Under the amendments to the Banking Law, systematically influential banks are obligated to become a joint-stock company and release their IPO in the financial market by June 30, 2022. State Bank will become a public company and launch an IPO. We’re working to submit our plan detailing on the implementation timeframe, IPO plan, share price estimates and survey of potential investors to Mongol Bank and the Fianncial Regulatory Commission by July 1, 2021,” the bank stated.

State Bank is one of the Top 5 banks in Mongolia, accounting for around 10 percent of the banking system. It runs nearly 500 branches across the country. At the end of 2020, it had assets of 3.5 trillion MNT, loans of 1.8 trillion MNT, and capital of 303.6 billion MNT. The bank earned a profit of 30.6 billion MNT in 2020, according to its report.

By turning banks into joint stock companies, the public is expected to have better oversight of their operations and financial situation.

At present, 192 companies are listed on the Mongolian Stock Exchange and their capitalization amounts to approximately 3.9 trillion MNT. Local commercial banks have capital of around 3.7 trillion MNT, 3.6 trillion MNT of which belong to the five systematically influential banks.