Month: December 2024

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Bank's financial accounting system

FINANCIAL ACCOUNTING FRAMEWORK

Post author By Otgontsetseg Kh
Post date December 9, 2024
No Comments on FINANCIAL ACCOUNTING FRAMEWORK

Chief financial officer and the finance units manage the following activities within the framework of financial accounting and control:

Oversee the financial reporting process, develop accounting policies in accordance with the legislations and IFRS, monitor their implementation, prevent and reduce potential risks;
Prepare and fairly present the bank’s financial statements in accordance with IFRS, facilitate external auditors with appropriate and sufficient evidence for auditing the financial reports, and provide financial information to all stakeholders;
Efficiently manage the budgeting and financial management activities, ensure the continuity of management information system, provide timely data and information to the management in support of timely decision making.

TransBank complies with relevant Mongolian laws, rules, regulations and guidelines for financial accounting and auditing, and implements the Bank’s internal accounting documents in its day-to-day operations in accordance with International Financial Reporting Standards (IFRS).

INTERNAL CONTROL FRAMEWORK

Internal Audit Division of TransBank carries out the Bank’s internal auditing activities and reports directly to the Board of Directors.

The Financial policy and control division is responsible for defining the Bank’s accounting policies in accordance with relevant standards, laws and regulations, while monitoring their implementation. In overseeing the financial reporting processes, the Division implements remote and on-site control over the operation of the core banking system and branches, towards ensuring accuracy, continuity, reliability of financial statements, and efficiency of the internal financial controls in prevention and reduction of potential risks.

Quarterly financial statements

2023 year III quarter

STATEMENT OF FINANCIAL POSITION

(MNT million)

1	ASSETS
1.1	Cash and cash equivalents	212,146
1.2	Due from banks and financial institutions	69,464
1.3	Financial investments	47,977
1.4	Loans and advances to customers (net)	622,451
1.4.1	Performing loans	564,519
1.4.2	Non-performing loans	81,232
1.4.3	Deferred loan payment	(173)
1.4.4	Accrued interest receivable	12,368
1.4.5	Loan loss provision	(35,495)
1.5	Derivative financial assets	1,779
1.6	Other financial assets	692
1.7	Other non-financial assets	15,242
1.8	Fixed assets	20,019
1.9	Properties held for sale	14,184
1.1	Intangible assets	12,952
1.11	Total assets	1,016,906
2	LIABILITIES
2.1	Current accounts	77,018
2.2	Savings accounts	468,980
2.3	Due to banks and financial institutions	210,370
2.4	Other funds	34,960
2.5	Derivative financial liabilities	2,516
2.6	Other liabilities	32,496
2.7	Total liabilities	826,340
3	EQUITY
3.1	Share capital	146,474
3.2	Share premium	15,647
3.3	Treasury shares	(7,032)
3.4	Retained earnings	35,419
3.5	Other reserves	58
3.6	Total equity	190,566
4	TOTAL LIABILITIES AND EQUITY	1,016,906

(MNT million)

OFF BALANCE SHEET
Contingencies and commitments (net)	14,848

INCOME STATEMENT

(MNT million)

1	Interest income	80,756
1.1	From Bank of Mongolia	1,747
1.2	From banks and financial institutions	2,596
1.3	From securities	5,320
1.4	From loans	67,595
1.5	Other interest income	3,498
2	Interest expense	54,282
2.1	Interest expense on current accounts	1,394
2.2	Interest expense on savings accounts	44,869
2.3	Interest expense on borrowed funds	1,693
2.4	Interest expense on securities	913
2.5	Other interest expenses	5,413
3	Net interest income (1-2)	26,474
4	Provision expense	6,044
4.1	Deposits at banks and financial institutions	–
4.2	Securities	–
4.3	Loans	6,044
5	Net income after provision (3-4)	20,430
6	Other income	23,538
6.1	Non-interest income	23,433
6.1.1	Trading income	11,017
6.1.2	Foreign exchange and revaluation income	11,445
6.1.3	Fees and commission income	926
6.1.4	Other non-interest income	45
6.2	Other income, gain	105
7	Other expenses	39,472
7.1	Non-interest expenses	39,182
7.1.1	Other provision expense	9
7.1.2	Trading expense	8,753
7.1.3	Foreign exchange and revaluation expense	10,727
7.1.4	Fees and commission expense	982
7.1.5	Other operating expenses	18,711
7.2	Other expenses, losses	290
8	Profit Before Tax (5+6-7)	4,496
9	Income tax expense	211
10	Net profit for the year (8-9)	4,285
11	Other comprehensive income	–
12	Total comprehensive income for the year (10+11)	4,285

PRUDENTIAL RATIOS BY THE BANK OF MONGOLIA	LIMIT	PERFORMANCE
Tier 1 capital ratio	≥ 9%	24.3%
Capital adequacy ratio	≥ 12%	24.3%
Liquidity ratio	≥ 25%	29.0%
Foreign currency open position ratio (single currency)	< ±15%	1.8%
Foreign currency open position ratio (total)	< ±30%	4.5%

LOANS AND ADVANCES TO RELATED PARTIES		CATEGORY OF ASSETS	BALANCE (MNT million)	PERCENT OF TOTAL EQUITY
1	Loans and advances to a related party (less than 5% of total equity)			3.3%
1.1	Bank shareholders	–	–	–
1.2	Key management personnel	–	–	–
1.3	Other related parties	Loan	6,353	3.3%
2	Total loans and advances to related parties (less than 20% of total equity)			13.6%
2.1	Bank shareholders	Loan	100	0.1%
2.2	Key management personnel	Loan	415	0.2%
2.3	Other related parties	Loan	25,456	13.4%

Quarterly financial statements

2023 year II quarter

STATEMENT OF FINANCIAL POSITION

(MNT million)

1	ASSETS
1.1	Cash and cash equivalents	225,711
1.2	Due from banks and financial institutions	62,780
1.3	Financial investments	37,151
1.4	Loans and advances to customers (net)	583,776
1.4.1	Performing loans	529,894
1.4.2	Non-performing loans	74,564
1.4.3	Deferred loan payment	(152)
1.4.4	Accrued interest receivable	13,899
1.4.5	Loan loss provision	(34,429)
1.5	Derivative financial assets	1,197
1.6	Other financial assets	558
1.7	Other non-financial assets	16,000
1.8	Fixed assets	21,710
1.9	Properties held for sale	14,184
1.10	Intangible assets	12,306
1.11	Total assets	975,373
2	LIABILITIES
2.1	Current accounts	70,651
2.2	Savings accounts	422,334
2.3	Due to banks and financial institutions	233,108
2.4	Other funds	21,290
2.5	Derivative financial liabilities	662
2.6	Other liabilities	38,155
2.7	Total liabilities	786,200
3	EQUITY
3.1	Share capital	146,474
3.2	Share premium	15,647
3.3	Treasury shares	(7,032)
3.4	Retained earnings	34,026
3.5	Other reserves	58
3.6	Total equity	189,173
4	TOTAL LIABILITIES AND EQUITY	975,373

(MNT million)

OFF BALANCE SHEET
Contingencies and commitments (net)			12,164

INCOME STATEMENT

(MNT million)

1	Interest income	54,870
1.1	From Bank of Mongolia	1,604
1.2	From banks and financial institutions	1,666
1.3	From securities	3,806
1.4	From loans	43,705
1.5	Other interest income	4,089
2	Interest expense	36,426
2.1	Interest expense on current accounts	943
2.2	Interest expense on savings accounts	28,164
2.3	Interest expense on borrowed funds	1,027
2.4	Interest expense on securities	768
2.5	Other interest expenses	5,524
3	Net interest income (1-2)	18,444
4	Provision expense	4,992
4.1	Deposits at banks and financial institutions	–
4.2	Securities	–
4.3	Loans	4,992
5	Net income after provision (3-4)	13,452
6	Other income	16,955
6.1	Non-interest income	16,867
6.1.1	Trading income	8,252
6.1.2	Foreign exchange and revaluation income	7,929
6.1.3	Fees and commission income	641
6.1.4	Other non-interest income	45
6.2	Other income, gain	88
7	Other expenses	27,248
7.1	Non-interest expenses	27,088
7.1.1	Other provision expense	230
7.1.2	Trading expense	7,190
7.1.3	Foreign exchange and revaluation expense	6,048
7.1.4	Fees and commission expense	737
7.1.5	Other operating expenses	12,883
7.2	Other expenses, losses	160
8	Profit Before Tax (5+6-7)	3,159
9	Income tax expense	267
10	Net profit for the year (8-9)	2,892
11	Other comprehensive income	–
12	Total comprehensive income for the year (10+11)	2,892

PRUDENTIAL RATIOS BY THE BANK OF MONGOLIA	LIMIT	PERFORMANCE
Tier 1 capital ratio	≥ 9%	26.0%
Capital adequacy ratio	≥ 12%	26.0%
Liquidity ratio	≥ 25%	29.8%
Foreign currency open position ratio (single currency)	< ±15%	5.2%
Foreign currency open position ratio (total)	< ±30%	10.9%

LOANS AND ADVANCES TO RELATED PARTIES		CATEGORY OF ASSETS	BALANCE (MNT million)	PERCENT OF TOTAL EQUITY
1	Loans and advances to a related party (less than 5% of total equity)			3.2%
1.1	Bank shareholders	–	–	–
1.2	Key management personnel	–	–	–
1.3	Other related parties	Loan	6,143	3.2%
2	Total loans and advances to related parties (less than 20% of total equity)			13.9%
2.1	Bank shareholders	Loan	100	0.1%
2.2	Key management personnel	Loan	426	0.2%
2.3	Other related parties	Loan	25,702	13.6%

Financial indicators Financial information

Санхүүгийн үзүүлэлт

	2023	2022	2021	2020	2019
Balance sheet (MNT million)
Total assets	1,213,495	1,162,001	733,121	360,158	524,421
Deposits from customers	676,805	579,764	363,476	96,842	306,001
Loans and advances to customers (Net)	671,768	556,701	433,651	216,739	254,428
Retained earnings	41,711	30,030	20,398	8,993	3,519
Total equity	196,899	186,223	182,641	109,040	81,653
Income statement (MNT million)
Interest income	117,843	85,122	50,815	44,854	57,525
Interest expense	(74,556)	(45,957)	(24,882)	(25,090)	(39,898)
Net interest income	43,288	39,165	25,933	19,765	17,627
Net fees and commission income (expense)	(407)	56	(85)	(106)	272
Net trading income	3,256	4,038	1,457	2,494	872
Other income (expense) from other financial instruments at FVTPL	1,103	(1,947)	(178)	50	(140)
Other income	795	3,536	55	683	790
Impairment losses on financial instruments	(8,975)	(9,300)	(589)	(8,134)	(6,414)
Operating expenses	(26,950)	(21,916)	(12,747)	(8,613)	(7,480)
Profit before tax	12,109	13,632	13,845	6,140	5,527
Income tax expense	(1,484)	(2,944)	(2,441)	(665)	(1,130)
Net profit for the year	10,625	10,688	11,404	5,474	4,397
PRUDENTIAL RATIOS BY THE BANK OF MONGOLIA (%)
Capital adequacy ratio	22.7%	26.8%	33.5%	39.7%	27.2%
Liquidity ratio	33.8%	37.0%	32.9%	28.5%	53.1%
Foreign currency open position ratio (single currency)	-2.9%	-2.6%	-2.4%	-9.4%	4.9%
Foreign currency open position ratio (total)	-8.1%	-3.2%	-4.8%	-9.4%	-14.2%

Sustainable Development Report

report_test_2024

AFS 2023 TransBank (mon)

Quarterly financial statements

2023 year I quarter

STATEMENT OF FINANCIAL POSITION

(MNT million)

1	ASSETS
1.1	Cash and cash equivalents	313,498
1.2	Due from banks and financial institutions	75,269
1.3	Financial investments	89,237
1.4	Loans and advances to customers (net)	567,373
1.4.1	Performing loans	508,338
1.4.2	Non-performing loans	76,442
1.4.3	Deferred loan payment	(134)
1.4.4	Accrued interest receivable	14,405
1.4.5	Loan loss provision	(31,678)
1.5	Derivative financial assets	4,412
1.6	Other financial assets	536
1.7	Other non-financial assets	19,452
1.8	Fixed assets	24,351
1.10	Intangible assets	10,401
1.11	Total assets	1,104,529
2	LIABILITIES
2.1	Current accounts	90,942
2.2	Savings accounts	439,542
2.3	Due to banks and financial institutions	339,762
2.4	Other funds	20,703
2.5	Derivative financial liabilities	5,743
2.6	Other liabilities	18,021
2.7	Total liabilities	914,713
3	EQUITY
3.1	Share capital	146,474
3.2	Share premium	15,647
3.3	Treasury shares	(7,032)
3.4	Retained earnings	34,670
3.5	Other reserves	57
3.6	Total equity	189,816
4	TOTAL LIABILITIES AND EQUITY	1,104,529

(MNT million)

OFF BALANCE SHEET
Contingencies and commitments (net)			9,149

INCOME STATEMENT

1	Interest income	28,666
1.1	From Bank of Mongolia	1,450
1.2	From banks and financial institutions	714
1.3	From securities	1,801
1.4	From loans	22,442
1.5	Other interest income	2,259
2	Interest expense	17,630
2.1	Interest expense on current accounts	436
2.2	Interest expense on savings accounts	13,279
2.3	Interest expense on borrowed funds	536
2.4	Interest expense on securities	490
2.5	Other interest expenses	2,889
3	Net interest income (1-2)	11,036
4	Provision expense	2,168
4.1	Deposits at banks and financial institutions	–
4.2	Securities	–
4.3	Loans	2,168
5	Net income after provision (3-4)	8,868
6	Other income	7,141
6.1	Non-interest income	7,081
6.1.1	Trading income	2,262
6.1.2	Foreign exchange and revaluation income	4,365
6.1.3	Fees and commission income	409
6.1.4	Other non-interest income	45
6.2	Other income, gain	60
7	Other expenses	12,273
7.1	Non-interest expenses	12,242
7.1.1	Other provision expense	158
7.1.2	Trading expense	2,407
7.1.3	Foreign exchange and revaluation expense	3,082
7.1.4	Fees and commission expense	472
7.1.5	Other operating expenses	6,123
7.2	Other expenses, losses	31
8	Profit Before Tax (5+6-7)	3,736
9	Income tax expense	200
10	Net profit for the year (8-9)	3,536
11	Other comprehensive income	–
12	Total comprehensive income for the year (10+11)	3,536

PRUDENTIAL RATIOS BY THE BANK OF MONGOLIA	LIMIT	PERFORMANCE
Tier 1 capital ratio	≥ 9%	26.7%
Capital adequacy ratio	≥ 12%	26.7%
Liquidity ratio	≥ 25%	37.6%
Foreign currency open position ratio (single currency)	< ±15%	4.8%
Foreign currency open position ratio (total)	< ±30%	5.2%

LOANS AND ADVANCES TO RELATED PARTIES		CATEGORY OF ASSETS	BALANCE (MNT million)	PERCENT OF TOTAL EQUITY
1	Loans and advances to a related party (less than 5% of total equity)			3.3%
1.1	Bank shareholders	–	–	–
1.2	Key management personnel	–	–	–
1.3	Other related parties	Loan	6,315	3.3%
2	Total loans and advances to related parties (less than 20% of total equity)			14.3%
2.1	Bank shareholders	Loan	100	0.1%
2.2	Key management personnel	Loan	1,344	0.7%
2.3	Other related parties	Loan	25,636	13.5%