Agricultural Bank of Mongolia
Agricultural Bank of Mongolia’s spectacular transformation from a state-owned bank on the verge of extinction in 2000 to a financial powerhouse now in the hands of a Japanese securities house has earned it the award.
How far Ag Bank has come in the past three years is evident in its profitability. Since 2000, when an independent management team took over to turn the bank around, it has increased its net profit eightfold and now boasts a ROE of 52.3%. Tier 1 capital also increased fourfold in 2002 compared with 2001.
Ag Bank is now Mongolia’s third-largest bank with a network of 368 offices nationwide and 1600 employees. It has around 400,000 customers, representing about 50% of all households. J. Peter Morrow, Ag Bank chief executive, said: “Three years ago, there was no transparent bank lending in the Mongolian countryside, and now through Ag Bank all individuals and businesses in every village of the country have access to credit for any appropriate purpose.”
Ag Bank’s high degree of automation is reflected in its processing an average of 34,000 new loans per month this year.
J. Peter Morrow, chief executive officer of the bank, said: “In 2000 we set out to fix a broken state-owned Ag Bank. We could not imagine that we would tap into huge latent demand for financial services in Mongolia and grow into a countrywide presence serving half of Mongolia’s households. Nor did we expect to become the most profitable bank in the country or to privatise the bank at a premium of twice book value. Now our 1700 employees, most of them from a public sector culture, have galvanised into a highly productive private sector business and, for the first time, Mongolians in every nook of the country have full access to banking services.”
Following the bank’s impressive turnaround, the Mongolian government in March 2003 sold the bank to HS Securities, a Japanese securities house, for $6.85m.
The runner-up was Mongol Post Bank.
