Moody's Upgrades Trade and Development Bank of Mongolia to 'B1'; Outlook Stable
Moody’s Ratings upgraded Trade and Development Bank of Mongolia JSC’s (TDBM) long-term deposit and issuer ratings to ‘B1’ from ‘B2’, while also upgrading its Baseline Credit Assessment (BCA) to ‘b2’ from ‘b3’. The outlook remains Stable.
The upgrade reflects continued improvements in asset quality and liquidity, alongside Moody’s expectation of a stronger funding profile over the next 12–18 months. TDBM’s NPL ratio declined to 5.2% at end-2025 from 19.9% in 2022, while core banking liquidity increased to 35% of tangible banking assets from 29% a year earlier.
Moody’s expects TDBM’s shift toward SME and retail lending to reduce concentration risks, although unseasoned retail lending risks remain. Funding stability is also expected to improve through greater use of long-term market funding and a gradual shift toward retail deposits.
TDBM’s Tier 1 capital ratio stood at 14.5% at end-2025, with Moody’s expecting TCE/RWA to remain above 14%. The rating also incorporates a one-notch uplift for government support, reflecting TDBM’s status as a domestic systemically important bank and its position as Mongolia’s third-largest bank, with a 21% asset market share.
CMM Perspective
Moody’s upgrade highlights TDBM’s significant improvement in asset quality and liquidity, alongside efforts to strengthen its funding profile. Key factors to monitor include retail lending risks, funding stability, capitalization and profitability, while the rating remains closely linked to Mongolia’s sovereign credit profile.
