XacBank PresentationXacBank Presentation
Holding Company
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Shareholders
3
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People, Planet and Profit Committed to community and environmental issues while operating based on sound commercial principles
XacBank: One of Mongolia’s strongest banks
A leading commercial bank in Mongolia
Established leader in the retail and SME business segments
International institutionalshareholder base
The only Mongolian financial institution which is majority owned by a broad base of globally recognized institutional investors, including IFC and EBRD
Experienced managementSeasoned management team with extensive banking experience in Mongolia and overseas (average banking experience of members of the management team exceeds 20 years)
Strong asset qualityOne of the lowest NPL ratios in the Mongolian banking industry due to stringent underwriting practice and sophisticated risk management systems
Strong capitalizationXacBank received 2 capital injections in 2011, raising approximately MNT37 billion in total from existing and new shareholders
Sound corporate governanceXacBank‘s corporate governance follows international standards and the Bank is recognized for its transparency
Large integrated branch network
An extensive branch, ATM and support center networks broadly covering the nation
XacBank: Key milestones
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2010 2011 1H2012
Total assets (MNT in billions) 468.4 817.6 895.4
Branch Network # 84 92 100
Employees # 1,172 1,327 1,404
Foreign Institutional Lenders #
24 28 31
NPL ratio 1 1.5% 1.2% 1.2%
Risk-weighted capital ratio (CAR)
13.7% 20.8% 19.7%
XacBank at a glance
XacBank was established in 2001
XacBank is one of Mongolia’s leading commercial ban ks, and one of the nation’s largest providers of retail and SME lending services
XacBank’s solid credit rating
Ratings
Moody’s FitchPlanetRating
Bank ofMongolia
Stable B1
StableB
Good4-
CAMELS “Good”
Mongolia Government
Stable B1
Stable B+
Our External Independent Auditors
Ulaan Baatar
6.8% 7.0% 7.0%
2010 2011 1H2012
Net Interest Income over Total Assets
7
Source: Company audit and review report
Net interest income drives revenue Efficiency is improving Profitability has rebounded since 2010
Net Interest margins remain healthy Low NPL ratio and conservative coverage5 Well capitalised to support future growth
Key performance indicators of XacBank
Consistent record of growth and profitability…
91.9%
93.9%92.9%
8.1%
6.1%
7.1%
2010 2011 1H2012
Net interest income Non interest income
29.1
48.2
32.3 67.3% 62.0% 61.9%
2010 2011 1H2012
1.5% 1.2% 1.2%
88.5%
102.5%100.2%
2010 2011 1H2012
NPL ratio Coverage ratio
9.7%14.4% 14.2%
8.1%
6.1% 5.5%
2010 2011 1H2012
Core Capital Ratio Risk Weighted Capital Adequacy Ratio
20.8%
13.7%
19.7%
(MNT in billions)
1.7% 1.9% 2.0%
20.6% 20.7% 20.0%
2010 2011 1H2012
ROAA ROAE
1 Calculated as a ratio of net interest income (before provision for loan impairment) divided by total operating income2 Calculated as a ratio of non-interest income (before provision for loan impairment) divided by total operating income3 Calculated as a ratio of net interest income (before provision for loan impairment) divided by average total assets4 Calculated as a ratio of administrative and other operating expenses divided by total income5 NPL are loans overdue for 90 days whereas impaired loans take into account overdue status, financial position of borrower and ability to realize related collateral.
Company impaired loan ratio was 1.6%, 1.2% and 1.8% for 2010, 2011 and 1H2012. Coverage ratio calculated as reserve for possible loan and lease losses over total NPL
(Cost efficiency ratio)4
3
1 2
Half-Year Results Half-Year Results Half-Year Results
Half-Year Results
8
Source: Company audit report
10 – 1H12CAGR(MNT in billions)
Through a growth strategy built on pioneering retai l lending and increased focus on the growing SME and Corporate sector, XacBank grows at a diverse and granular level
Established growth track record…
Deposit Growth
Gross loans
Customer deposits
Source: Company audit report
10 – 1H12CAGR(MNT in billions)
63%
50%40%33%
85%
49%
Loan Growth
Source: Company dataMain mining exploration site
Strategy
Maintaining XacBank’s commitment to corporate and social responsibility
Expanding the deposit base
Maintaining customer focus and enhancing service quality
Expand XacBank’s presence in SME sector and develop its presence in consumer lending in urban areas
Consolidate XacBank’s status as a preferred and leading financial institution for Mongolian retail and SME customers and preferred transactional bank for
corperates
Increase SME and Corporate business while maintaining leadership in retail
Solidify and expand XacBank’s position as a leading Mongolian financial
institution
Contributeto the social
and economic development of
Mongolia
30 65.4 56.2 42.882.6 107.3
164.4
217.3299.1 237.2
365.3
462.7
2010 2011 1H2012
Current account Demand / Saving Time
125.7235.7 262.058.3
106.9 106.8
57.9
75.8 95.5
48.2
69.173.7
325.9
542.5583.6
2010 2011 1H2012
SME Mortgage Micro Business Customer loan Finance lease Other
Corporate Social Responsibility
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Corporate Social Responsibility
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Corporate Social Responsibility
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LOOKING FORWARD TO PARTNER FOR BETTER MONGOLIA AND YOU!
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