FMO supports XacBank with second tier capital increase
XacBank signed a USD 15 million, five-year term subordinated loan agreement with FMO, the Dutch development bank, to increase XacBank’s second tier capital and to support the expansion of its lending to Mongolian SMEs.
With the support of this transaction, XacBank enhances its capital adequacy ratio to 16% and with the addition of MNT 21.8 billion to total equity in Q4 this year the figure is expected to exceed 19%, which will be the highest in the banking sector of Mongolia. The increase in capital will also help the bank to foster progressive growth and enhanced services with greater outreach and impacts on customers.
XacBank’s CEO Bat-Ochir Dugersuren noted, “This long term financing is being provided by FMO for the fifth time after researching XacBank’s performance, which signifies the sustainability in development, the success of the Bank’s operations, and the growing affiliation between the two organizations”.
“FMO is glad to sign this Subordinated Debt Agreement with XacBank today. XacBank is one of our strategic partners in Mongolia, and we are pleased to be able to support its growth, and expansion to SME lending activities. FMO believes that a thriving private (SME) sector will lead to lasting economic and social development. Through XacBank’s reach in the domestic financial market, FMO was able to to provide greater support to Mongolian people. We believe there are more opportunities FMO and XacBank could work on together, in areas such as trade finance, housing, leasing and energy efficient project financing,” said Alwin Kool, Investment Officer at FMO.
About XacBank
XacBank is one of the major banks in the country that provides its clients diversified financial services, innovative products, and premium hospitality through its network of over 91 branches across the nation. Since its inception, the Bank significantly contributed to attract foreign investment in Mongolia by obtaining a total of USD890 million in the form of loan from 30 different organizations in order to support Mongolian micro, small and medium enterprises, to deliver comprehensive and inclusive financial services for the long term.
www.xacbank.mn
About FMO
FMO (the Netherlands Development Finance Company) is the Dutch development bank. FMO supports sustainable private sector growth in developing and emerging markets by investing in ambitious entrepreneurs. FMO believes a strong private sector leads to economic and social development, empowering people to employ their skills and improve their quality of life. FMO focuses on four sectors that have high development impact: financial institutions, energy, housing, and agribusiness. With an investment portfolio of EUR 5 billion, FMO is one of the largest European bilateral private sector development banks.
www.fmo.nl
