S&P cuts Mongolian banks, debt

Standard & Poor's said it lowered the long-term issuer credit ratings on Development Bank of Mongolia to B from B+, Trade and Development Bank of Mongolia LLC to B- from B and Golomt Bank of Mongolia to B- from B.

The outlook is stable.

The agency affirmed the short-term issuer credit ratings on these banks and lowered the issue rating on Development Bank of Mongolia’s debt to B from B+ and Trade and Development Bank’s bank to B- and B from B and B+, respectively.

S&P said the actions follow the lowering the long-term sovereign credit rating on Mongolia to B from B+. It also lowered Mongolia's economic risk score and Banking Industry Country Risk Assessment to 10 from 9, and therefore lowered the anchor stand-alone credit profile for Mongolian banks to b from b+.

In the agency’s view, Mongolia's economic resilience is likely to weaken as a result of the slowdown in economic performance and outlook. This would heighten economic risks for the country as well as its banking system.

In particular, S&P said it expects weak exports and investment inflows to continue to weigh on Mongolia's growth outlook. Moreover, gaps in the country's institutional effectiveness and predictability could hamper policy responses.

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