Moody’s cuts seven Mongolian banks

Moody's Investors Service said it downgraded the foreign currency long-term deposit ratings of seven Mongolian banks to Caa1 from B3, and initiated a review for further downgrade.

The seven banks are: Bogd Bank LLC; Capital Bank LLC; Golomt Bank LLC; Khan Bank LLC; State Bank LLC; Trade and Development Bank of Mongolia LLC; and XacBank LLC.

The agency also downgraded the local currency deposit ratings of Golomt, Khan Bank, State Bank, Trade and Development Bank and XacBank to B3 from B2, and placed the ratings on review for further downgrade.

In addition, Moody's placed the B3 local currency deposit ratings of Bogd Bank and Capital Bank on review for downgrade.

At the same time, the agency downgraded the foreign currency long-term issuer rating of Trade and Development Bank of Mongolia to B3 from B2.

Moody’s said the actions follow its downgrade of Mongolia's sovereign ratings to B3 from B2 and the placing of the ratings on review for further downgrade on Aug. 26.

The action on the seven banks' ratings is based on the consideration that the creditworthiness of the Mongolian banking system is highly correlated to that of the sovereign, the agency added.

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