When Golomt Bank listed in November 2022 following a hugely popular and oversubscribed MNT103.3 billion ($30.5 million) IPO, it wasn’t just another listing in Mongolia. Rather, it was a bold statement that the country’s banking sector is evolving and that Golomt was leading the charge.
The 110.7% oversubscription to its deal was just one indication of how far Golomt had come since it was set up in 1995 with just four employees. Today, it is one of Mongolia’s leading commercial banks, with more than 2,300 employees and a 20% share of the banking sector.
Its financial performance has also been stellar. Its net profits rose 2.4 times year-on-year to MNT275.8 billion by the end of the second quarter of 2024, while its annualised return on average equity hit 54%.
Golomt’s IPO was a game-changer, not just for the market but for the firm’s own credentials. It helped enhance its governance and transparency framework, boosted investor confidence and public trust in the bank, and helped align its strategy with international standards.
It also helped the firm further cement its credentials in the international market. Take its $300 million senior unsecured bond issuance in May 2024 as an example. The deal, which marked the return of Mongolian commercial banks to the international debt capital market after more than a decade’s absence, received demand of some $500 million from global asset managers and hedge funds and further bolstered the firm’s global reputation.
That is only likely the beginning. According to Odonbaatar Amarzaya, Chief Executive Officer of Golomt, the firm is seeking opportunities to return to the bond market to capitalise on strong investor demand.
We want to catch these opportunities to make a step forward in achieving our goals as a bank with an increasing international presence.
Strong positioning
Growth is a priority for Golomt, which has developed a 2024 to 2026 medium-term strategy to fuel the business. As part of that, the B+ rated bank has set its sights on six areas: increasing its international presence to become Mongolia’s global bank; aligning its risk reporting standards with international levels; supporting sustainable finance; creating a digital banking framework; expanding its customer base; and strengthening support for small and medium enterprises (SMEs) and women-owned companies.
In June 2023, it decided to ride on strong economic growth to expand its reach into rural Mongolia and support more SMEs.
It took that a step further this January, when it made structural changes to improve customer experience, digital transformation, private banking, loan operations and wealth management services.
Digitalisation has long been a big focus, given belief among the management that it helps improve financial inclusion and the performance of the financial sector, and offers more support to under-served groups in the country.
To that end, in 2023, Golomt updated Mongolia’s first digital wallet, SocialPay, and unveiled a 3.0 version of the app aligned with global trends. It also launched the SocialPay Junior app for children and the youth – in a bid to get the younger generation into the financial system at an early age.
Account recognition using artificial intelligence and virtual credit card services are all among Golomt’s unique offerings in the country.
That impetus on digitalisation is paying off. In the first half of 2024, the firm’s digital banking users jumped by 49,000, the total amount of digital transactions rose by 50%, the number of SocialPay users climbed 20% and digital loan increased by 125%.
There’s also more in the works given Golomt’s aim to be at the forefront of digital banking in Mongolia. Cloud technology, blockchain and gamification tools are all being looked at, alongside the use of virtual assistants at call centres and bolstering the use of AI in personal finance.
Pioneering force
Under the leadership of CEO Odonbaatar, Golomt has ensured it is a pioneer in Mongolia’s banking and financial circles. As a systemically important privately-owned bank in the country, Golomt has stayed ahead of peers through bold moves. Whether it was being the first to introduce an international payment card system or bringing innovative products and services to Mongolians, Golomt has been a first mover.
Its well diversified portfolio – 30% corporate, 27% retail, 24% SMEs and 19% mortgage market – holds it in good stead. And when combined with its sustainability focus, Golomt’s proposition becomes hard to beat.
In recent years, the bank has been actively partnering with more than 40 foreign and domestic project loan programmes, increasing the benefits for the environment and society. Its green loan portfolio has surpassed MNT192 billion as of 2024H1, with 38.16% of the financing going towards strengthening sustainable agriculture and 49.70% for energy efficient buildings and equipment.
For SMEs, Golomt remains the go-to bank, with its share of the small and medium business market reaching 22.6% this year. For women entrepreneurs, Golomt has improved the terms of its loans, thanks to which its women loan portfolio rose 110% year-on-year in 2024, via loans to more than 600 customers.
If Golomt’s emphasis on SMEs, sustainable finance and digitalisation – the key tenets of Mongolia’s financial sector and economy – remains strong, its continued success can be all but guaranteed.