An Exclusive Interview with State Bank CEO Gantur Ulzii

State Bank is a leading financial institution in Mongolia, playing a crucial role in delivering banking services, supporting government initiatives, and driving sustainable economic growth. With a strong focus on financial inclusion, green banking, and digital transformation, the bank continues to expand its reach and impact across the country.

Wanda Rich, Editor of Global Banking & Finance Review, interviewed Mr. Gantur Ulzii, CEO of the State Bank of Mongolia, to discuss the bank’s strategic evolution, its role in strengthening Mongolia’s financial sector, and its initiatives to enhance financial accessibility, sustainability, and digital banking solutions.

How has the bank evolved from its early beginnings to become a significant player in Mongolia’s financial sector today?

The State Bank is recognized as one of the five systemically influential banks in the Mongolian financial system. Since its establishment, we have consistently met, and often surpassed, the criteria set by the Bank of Mongolia, maintaining a prudential ratio well above the required standards. We have also successfully fulfilled our annual business plan objectives, with completion rates ranging from 100% to 130%. As of the end of 2024, the bank has reported a profit of 108 billion tugriks. In summary, we have consistently honored our obligations to our customers and depositors, entering the next 15 years with their trust fully intact.

As a state-owned bank, we have a responsibility to deliver government programs, projects, and policies to citizens through our banking services. Additionally, we provide essential welfare and pension services that other banks are often reluctant to offer, thereby contributing significantly to both economic and social development.

In 2021, the Government of Mongolia designated the State Bank as a key institution supporting the middle class. In support of this mandate, we have developed and implemented a comprehensive strategic plan. Furthermore, as part of broader reforms in the banking sector, the Banking Law was amended, enabling the transformation of systemically important banks into joint-stock companies. The State Bank led this initiative, becoming the first systemically important bank to transition to a publicly traded joint-stock company, offering new investment opportunities to the public.

The banking sector plays a crucial role in national development, driving progress, fostering sustainable growth, and setting an example in social responsibility. The State Bank is particularly focused on strengthening its partnerships with both public and private sector organizations to advance key goals, such as mitigating climate change, financing environmentally sustainable projects, and supporting green development. Through our commitment to green financing, we aim to raise public awareness, promote its benefits, and improve accessibility, thereby contributing to the achievement of the United Nations Sustainable Development Goals.

Expanding financial inclusion is a key priority for many banks. How is State Bank reaching underserved populations and making retail banking more accessible to Mongolians, especially in rural areas?

The State Bank was established in 2009 with the primary objective of safeguarding the interests of customers and depositors while ensuring the bank’s financial stability. In 2013, the bank expanded its operations to serve small and medium-sized businesses and individual citizens, with the vision of becoming a nationwide institution that reaches every corner of the country. Today, the State Bank serves over 2.3 million customers through a network of 500 branches located in Ulaanbaatar, 21 provinces, and all soums.

This extensive network ensures that even customers in remote areas, including farmers and nomadic communities, have access to world-class banking and financial services. Our customers are fully equipped with the ability to easily access savings, loans, and card products through self-service kiosks, ATMs, and the Gyalsbank /the mobile bank/ app. In addition, they can conveniently make payments for various services, including consumption, taxes, and insurance, as well as receive 66 types of reference information from 12 government organizations, all free of charge.

Customer trust and satisfaction are at the heart of retail banking success. What are some of the key measures State Bank has implemented to enhance customer experience and build lasting relationships?

As part of its commitment to fostering financial literacy within the framework of supporting the middle class, the State Bank has provided free financial education to students in secondary schools, universities, and colleges. Additionally, the bank has adapted its products and services to better meet the evolving needs of citizens, making them more flexible and accessible. Special products tailored to the daily lives of citizens—such as those focused on health, education, housing, and SME employment—have been introduced to the market.

Furthermore, enhancing customer satisfaction involves not only ensuring smooth daily operations but also steadily improving financial performance. Over the past six years, the bank’s profit has demonstrated consistent growth, particularly over the last three years. This increase in profitability has led to higher dividends for small shareholders of the State Bank JSC, as well as a rise in taxes paid to both the state and local budgets.

What challenges has the State bank faced over the past 15 years, and how have these shaped the bank’s growth and strategy?

Over the past 15 years, the State Bank has navigated and overcome numerous challenges to reach its current level of success. The most significant of these challenges was the global COVID-19 pandemic, which occurred between 2020 and 2022. In hindsight, we can reflect on the many obstacles we faced during that period and how we were able to overcome them with minimal health and economic impact. During the emergency situation brought on by the pandemic, the State Great Khural, the Parliament and the Government of Mongolia launched the “10-Billion-Dollar Comprehensive Plan to Protect Health and Restore the Economy.” In support of this initiative, the State Bank provided loans totaling 442 billion tugriks to approximately 9,000 citizens and businesses, helping to preserve 20,000 jobs. Furthermore, our team played a leadership role, collaborating with other organizations and banks to deliver essential banking services while strictly adhering to infection prevention protocols.

The State Bank has consistently enhanced its credit risk management systems, ensuring the effective implementation of operational policies and procedures. Notably, for the first time in Mongolia, the Government of Mongolia and the Bank of Mongolia successfully passed the Asset Quality Assessment (AQA) review conducted by the International Monetary Fund (IMF) under the “Extended Financing Facility” program. This review evaluated the quality of banks’ loan portfolios. As a result, in 2022, the Bank of Mongolia, alongside PWC Kazakhstan, an international audit firm, successfully assessed five systemically important banks based on the AQA review results, further validating the State Bank’s ability to offer risk-free financial services.

ESG is becoming an essential part of banking globally. What specific ESG goals does the State Bank aim to achieve, and how are these integrated into the bank’s long-term strategy?

In recent years, governments and financial institutions around the world have placed increasing emphasis on environmental, social, and governance (ESG) issues, studying and adopting best practices to achieve sustainable development goals. As a result, strategies and goals that promote environmental sustainability, social well-being, and transparent governance have been proposed, accompanied by long-term action plans and phased measures for their implementation.

As a state-owned institution, the State Bank is dedicated to supporting environmentally and socially responsible activities that minimize negative impacts and foster good governance, all in alignment with Mongolia’s sustainable development goals. For example, we are promoting renewable energy and energy-efficient technologies through tailored financial products, as well as working to enhance livestock productivity within the agricultural sector. The bank’s long-term strategy centers on advancing green banking initiatives that contribute to sustainable development as a key focus area.

How does the bank plan to contribute to Mongolia’s broader sustainability goals, particularly in supporting businesses and individuals adopting more sustainable practices?

In 2022, the State Bank renewed its vision and mission, aligning with the goal of “Supporting the Middle Class.” As part of this initiative, the bank introduced household and start-up business loan products to the public, while also offering financial education and consulting services for aspiring entrepreneurs. As a result of these efforts, in 2023, the bank issued shares to the public, successfully raising 25.4 billion tugriks. This made the State Bank the first joint-stock company among the leading banks in Mongolia’s financial system.

Fifty percent of the funds raised from the primary market were allocated to support the middle class, while the remaining 50% was directed towards loans aimed at sustainable development, marking a significant milestone in the bank’s sustainability initiatives. In 2024, the Government of Mongolia tasked the State Bank with becoming a green bank dedicated to sustainable development. In response, we are planning a series of key initiatives to further enhance the bank’s business model by integrating sustainability into our policies. These initiatives include attracting green financing, issuing green bonds, introducing new green products and services focused on sustainable development, and transitioning to renewable energy technologies to reduce energy consumption across our offices and branches.

What role do you think the State Bank of Mongolia will play in leading the financial sector toward a more sustainable and inclusive future?

The State Bank extends its services to every citizen through a network of 500 branches across Mongolia, actively supporting and implementing government programs designed to maximize their impact. As of this year, we have clearly defined our goal of becoming a leading green bank. Our ongoing efforts are focused on achieving sustainable development goals through banking and financial services that prioritize environmentally responsible practices, respect human rights, and ensure accessibility to meet the diverse needs of our customers.

The green banking initiatives undertaken by the State Bank are pivotal to advancing key national objectives. These include supporting the country’s commitment to reducing greenhouse gas emissions by 22.7 percent, as outlined in the Paris Agreement; enhancing livestock productivity and improving breeding practices; addressing pastureland degradation and overgrazing; adapting to climate change; promoting rational energy consumption; reducing air and environmental pollution; and fostering green economic growth through strategic public-private partnerships.

Looking to the future, what are your aspirations for State Bank’s retail banking operations? How do you envision the bank continuing its success and shaping the future of retail banking in Mongolia?

We have set a goal to establish ourselves as a leading national bank that provides comprehensive financial services that are environmentally sustainable, socially responsible, and in line with international standards. Over the next five years, we are committed to implementing green banking initiatives aimed at sustainable development, while prioritizing shareholder interests, fostering the growth of small and medium-sized businesses, and enhancing the quality of life for citizens. To achieve these goals, we have outlined five key priority areas:

1. Expanding our market presence, achieving targeted financial indicators, and increasing sustainable green financing.
2. Implementing green banking practices to promote sustainable development.
3. Transitioning to digital platforms and expanding digital channels.
4. Enhancing customer satisfaction.
5. Ensuring the stability and continuity of the bank’s operations.