Moody’s reviews seven Mongolian banks

Moody's Investors Service said it placed the long-term ratings of seven Mongolian banks on review for downgrade following its review for downgrade of Mongolia's sovereign ratings on Feb. 15.

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.

Moody’s said the action reflects the high correlation between the creditworthiness of the Mongolian banking system and that of the sovereign, given: (a) The strong extent to which the banks' businesses depend on macroeconomic and financial conditions in Mongolia, and in view of the low level of cross-border diversification in their operations; and (b) their significant direct and indirect exposures to domestic sovereign debt relative to their capital bases.

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