Banking and Mining Sector

Mr. Amarbayasgalan EnkhsaikhanDirector of Investment Banking Division

Macro Economy / Investment Environment

2

Mongolia’s economy grew by 5.3% in H1’2014

Mining grew by 16.1% YoY due to OT production

Agriculture is up by 16.3% YoY

Logistics grew by 11.9% YoY

Retail is down by 12.3% YoY

Source: World Bank

Mongolian GDP growth Mongolian trade deficit

(710)

(252) (292)

(1,781)

(2,354)(2,089)

(156)

(2,500)

(2,000)

(1,500)

(1,000)

(500)

-

2008 2009 2010 2011 2012 2013 2014 6 сар

Mln

US

D

Source: NSOAgriculture, fishery, hunting 16.30%Mining 16.10%Processing 0.30%Electricity, gas 1.30%Construction -1.80%Retail and automotive service -12.30%Logistics and storage 11.90%Communications 2.50%Other Services 7.20%

Trade between Mongolia and China to reach $10B by 2020 (Source: Xinhua News)

mining, infrastructure, processing of mineral products, energy, agriculture, tourism, communications, border ports, currency swap, and cross-border economic cooperation zones

Trade between Mongolia and Russia to reach $10B by 2020 (Source: Aljazeera America)

Negotiations to begin on Mongolian exports to Russia without tax or customs for the next 20 years

Visa-free travel

Ulaanbaatar Railways

Mining and infrastructure

Economic Forecast

3

Economic outlook:

17.5%

12.4%11.7%

0%2%4%6%8%

10%12%14%16%18%20%

2010 2011 2012 2013 2014 2015 2016

30% 50%70%90%

Confidence interval:

Source: Golomt Bank estimateMedian:2014: 8.3%2015: 8.8%2016: 9.1%

GDP forecast

Banking and Mining sector growth comparison

4Source: NSO, Bank of Mongolia

(Bln MNT)

Mongolia’s banking sector is directly correlated to the mining sector Spill over effect of mining investments affect other industries such as retail, real estate and logistics etc

-200

0

200

400

600

800

1000

1/31/2009 1/31/2010 1/31/2011 1/31/2012 1/31/2013 1/31/2014

Mining sector sales Banking sector profit

Banking Sector

5

2.5%

0.7%

5.5%

7.0%

3.0%

12.4%

2.2%

6.2%

4.8%

4.3%

0% 5% 10% 15%

Finance, in…Real estateCommunic…Hospitality

ConstructionLogistics

AgricultureProcessing

TradeEnergyMining

Loan qualities by industry

14

19

27

39

41

81

207

257

543

- 100 200 300 400 500 600

Hospitality

Finance, insurance

Logistics

Agriculture

Communications

Mining

Trade

Construction

Real estate

Loans in 2014 by industry (MNT bn)

Mining loans are small

Source: BoM, Golomt Bank

Source: BoM, Golomt Bank

Past-due %

Mining Loans

6Source: Bank of Mongolia

72.0

116.4

97.1

44.5

29.0

12.8 8.8 10.4

-

20.0

40.0

60.0

80.0

100.0

120.0

140.0

Golomt Bank

Khan Bank

TDBank Xac Bank State Bank

UBC Bank

Capital bank

Others

SINGLE BORROWER LIMIT OF BANKS (All Industries)

20.2%

79.8%

GOLOMT BANK LOANS OUTSTANDING TO THE MINING SECTOR

Golomt Bank

Other banks

Low number of mining loans because: Domestic interest rate is high due to high funding costs Mongolian banking sector’s size Foreign investments are preferred by miners

Banking Sector

7

Banking sector growth

21.5%

34.8%

23.9%19.9% 18.2%

1.2% 2.4% 1.9% 1.4%1.3%

11.5%5.8% 4.2% 5.3% 4.6%

0.0%

10.0%

20.0%

30.0%

2010 2011 2012 2013 H1 2014

ROAC ROAA NPL(bln MNT)

Banking sector ratios

0%10%20%30%40%50%60%70%80%

2011 2012 2013 2014

Money supply growthLoan growth

Money supply and loan growth rate (YoY)

Source: NSO, Bank of Mongolia

Source: NSO, Bank of Mongolia

Source: NSO, Bank of Mongolia

0

5000

10000

15000

20000

25000

Total asset Net loan Total capital

Golomt Bank Overview

8

18.1%

22.2%

22.9%

8.7%

9.1%

5.7%3.7%

9.8% GolomtKhanTDBXacStateUbcityCapitalOthers2014 Jun

2013

Banking Sector Market Shares 3rd Largest Mongolian Bank “B” Rated by Standard & Poor's Professional Corporate Team for Mining Business Cooperation with all Biggest Mining Companies in

Mongolia Leading Financing Service Provider for mining

companies Excellent Advisor Team for Foreign and Local

Investors

Golomt Bank

0.0%

5.0%

10.0%

15.0%

2010 2011 2012 2013 H1 2014

Banking sector

Golomt

NPL

0.0%

10.0%

20.0%

30.0%

40.0%

2010 2011 2012 2013 H1 2014

Banking sector

Golomt

ROAC

Source: Bank of Mongolia, Golomt BankSource: Bank of Mongolia, Golomt Bank

Source: Bank of Mongolia

2012

54.4 101.7

134.6 162.7

200.1

2009 2010 2011 2012 2013

9

Capital management

We have achieved high growth with sound capital structure

Total Capital(US$ million)

High Liquidity with Well-Managed LDR

63.5 59.667.9 69.4 71.5

2009 2010 2011 2012 2013

(%)

CAR and Tier 1 Ratio(%)

13.4 13.5 12.9 13.3 16.7

10.9 8.8 9.5

11.2 12.6

2009 2010 2011 2012 2013

CAR Tier1

30% 38%

70% 62%

All BanksOther Assets Liquid Assets

Asset Split (2013)

USD 12.6B USD 2.2B(%)

Golomt Bank Highlights

Recognition

“Best Bank Of Mongolia 2013” Global Finance “Best Internet Bank Of Mongolia 2014” Global Banking and Finance Review Awards “Best Retail Bank Of Mongolia 2014” Global Banking and Finance Review Awards “Entrepreneur Of The Year 2013” Mongolian National Chamber of Commerce and Trade

Electronic banking

Premier banking

Issue credit cards

Implement “Finacle” core banking system from Infosys Corporation

Western Union Money Transfer Service

Compliant with the Foreign Account Tax Compliance Act (FATCA)

First Custodian Bank

Investment Banking

The first Mongolian bank to:

10

Golomt Corporate Banking

Golomt Bank’s corporate banking portfolio

Investment BankingWe provide innovative & comprehensive financial advisory, capital raising, structured financing, risk management and execution services to our clients.

• Corporate advisory and Capital raising• Project Finance and ECA financing• Custodian service

Corporate BankingAs a leading bank for corporate clients, we provide cost-efficient and tailor made financing solutions for our clients’ financing needs:

• Mining• Pre-export financing

Corporate solutions

19.0%

17.2%

16.5%16.2%

15.8%

4.1%11.3%

Mining &Exploration Electricity & Oil

Manufacturing Trade - Whole & Retail

Construction Tourism

Others

11

Source: Golomt Bank

Golomt bank in Mining Sector

12

Working Capital Facilities Short-term Capital Investment Loans Co-Finance and Syndicated Loans Project finance

Mining projects and Supply Chain Financing

Trade Finance Instruments Pre-export financing Equipment import LC Payment guarantee

Projects to be implemented by PPP method (Concession list)

7

18

2

2

12

4

82

1

4

Infrastructure

Road construction

Pipeline

Airport

Energy

Environmental

Education

Healthcare

Leisure

Projects submitted to low-interestGovernment Loan Program (by size)

47.4%

11.2%

11.2%

9.7%

5.4%

Construction material Mining

Metallurgy & combustion Food & beverage

Energy Chemical

Light industry Leather, Cashmere and Wool

Healthcare

13

Project financing needs

Source: Development Bank of MongoliaSource: http://www.med.gov.mn/

14

Correspondent Banking & Trade Finance

Business alliance with over 30 reputable global financial institutions

•Agriculture bank of China•Bank of China•Baoshang Bank•China Construction bank•Industrial Commercial Bank of China•China Citic Bank•Bank of Inner Mongolia-China

•Mizuho Bank Ltd•Sumitomo Mitsui Banking Corporation•Bank of Tokyo Mitsubishi UFJ, Ltd

•Australia and New Zealand Banking Group Limited

•Canadian Imperial bank of Commerce •Commerz Bank AG, FF/AM Main

•Deutsche Bank AG•BHF-Bank AG, Frankfurt am Main

•KazKommerts Bank

•Korea Exchange Bank•Shinhan Bank, Seoul•Kookmin Bank, Seoul•Daegu Bank

•Bank of China (Hong Kong) Limited

•Land Bank of Taiwan•Taiwan EXIM Bank

•Sber Bank, Russia Baikalsky Office•Sber Bank, Russia, Moscow head office•JSC Bank of Foreign Trade•Russian Agricultural Bank

•United Overseas Bank Limited•DBS Bank

•Barclays Bank PLC

•Standard Chartered Bank•Deutsche Bank Trust Company Americas

•Marsheq Bank

•Atlantic Forfaiterungs AG

•Nordea Bank Finland PLC

•Banco popolare DI Vicenza SCPA•SACE

•Kuveyt Turk KatilimBankasi A.S

•Hungarian EXIM Bank

•BNP Paribas

•Asian Development Bank

15

Golomt Bank as a custodian

Amarbayasgalan EnkhsaikhanDirector of Investment Banking Division Golomt Bank

Email: amar@golomtbank.comMobile: +976 – 9910 8339Tel: +976-70117676 /1405/

Contact details: