S&P lowers two Mongolia banks views to negative

S&P said it revised the outlooks on two major Mongolian commercial banks – Trade and Development Bank of Mongolia LLC and Golomt Bank of Mongolia – to negative from stable.

The agency also said it affirmed the banks’ B- long-term issuer credit ratings.

A weaker economic growth outlook and deteriorated fiscal and external conditions could undermine the operating environment for Mongolia's banks, S&P explained.

These factors also were key considerations in the lowering of the Mongolian sovereign ratings Aug. 19, the agency said.

Profitability of the country's banking sector will likely remain under significant pressure mainly due to deteriorating asset quality, S&P said.

Mongolia's weak external condition also could add to banking system risks and increase overall funding costs, the agency said.

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