Corporate Banking in Mongolia
Hi guys, I work in Mongolia as a corporate banker. I thought it would be interesting for you guys to know about how we in Mongolia work. As you might expect, it isn't that sophisticated and is rather pretty straight-forward and simple.
The Banking sector in Mongolia: We have 13 commercial banks and 3 of them are considered big. Each of them owns 20-25% of the market share and other 2 banks own about 10% each, meaning big 5 banks own 90% of the market. I work in one of the big 3. Mongolia has a pretty junkie credit rating and so do our banks.
About what I (will) do: Because I'm new to the job I can't speak to what most corpbankers in Mongolia do but I can describe what I have seen and done thus far. Our job title is Relationship Manager; we manage relationships between the bank and our clients. Our main responsibility is to give loans to corporate clients, attract their deposits and resolve their problems with the bank.
The loan size is usually between 1$-10$ mil. and sometimes it can go up to 50$ million. Very tiny compared to what you guys deal with but considering the size of Mongolia’s GDP is just 10$ billion, you can imagine it is pretty big money here. Loans include business loans, investment loans, trade finance etc.. No special skills or degrees required to be a RM. Except our banking OS which is made by Sri-Lankan company, we only use Excel and Word for our work. We use Excel to prepare cash flow, balance sheets and income statements.
I dont know for sure but I think our work is similar to what retail bankers do in the U.S. Probably the only difference is that we usually meet and work with CEOs and CFOs of “big” companies and get to know them personally and occasionally party with them. Of course “big” by Mongolian standards. My monthly pay is about $800usd before taxes and social insurance and it is considered ok here but abysmal by western standards. I earned twice as much when I was a student and worked as a part-time waiter.
People who work in mining earn 3-4k and their salary is considered huge. Even though we have an investment banking division, their work and role are not as same as in the West. Today I read that since 2005 only 14 IPOs had been issued and the Mongolian stock exchange is considered the 2nd smallest in the world. As can you see there is virtually nothing an investment banker can do in Mongolia. That is why the corporate banking division is considered more “prestigous” than IBD.
Some of you might be amazed but our average loan interest rate in local currency is 18-20% per year and savings is around 15-16%. USD loans are around 12-15% and savings rating is around 7-8%. If you are fine with the risks you can earn a pretty good amount just from the interest income. I know a few clients who have a couple of million USD and earn about 300-400K per year.
That's all for now, I hope you guys enjoyed my story.
