Annual Report 2015

ANNUAL REPORT
2015
THE FIRST COMMERCIAL BANK OF MONGOLIA

ANNUAL REPORT 2015
C O N T E N T S
Vision, Mission and Value 02-03

Message from Director of the BOD
04-06
Message from CEO 07-09

Capital bank in year 2015 10-15
- Highlights of 2015 -
- Social responsibility - Sustainable financing Corporate governance 16-18
Shareholders 19-20
Board of directors 21-22
Executive management
23-27
Financial indicators 28-31

Human resource management 32-34
Risk management 35-36
Information technology 37-38
Treasury management 39-41
International cooperating organizations 42-44

- Best partners -
Capital Market Corporation SC LLC
45-46
Our mission for 2016 47-48

Locations of Branches and ATMs 49-57
Audited financial statements 58-62
CAPITAL BANK
Annual report 2015
OUR MISSION
To be the efficient bank with solid growth, potentially providing reliable service with
respect, business ethics and responsibility
CAPITAL BANKS IDEOLOGY AND VALUES

We acknowledge that activities leading to fulfillment of Sustainable
development goal are permanently conducted operations and therefore,
we support delivery of financial services to entities and individuals that
conduct operations with no negative impact to environment and public
health in policy level and we will ultimately become the disseminator who
calls for awareness.
Each employee of the bank will undertake their duties loyally and
wholeheartedly, be innovative and creative, and get their efforts appraised
honestly
We will ensure the appropriate implementation of Law against money

laundering and terrorism financing and avoid from non-humanitarian,
illegal activities such as any kind of corruption, organized crime, drug,
weapon and human trafficking. We will combat against such activities.
We will deliver advanced banking and finance services that are consistent
with global and international standards, that are in line with modern
information and technology development and ultimately become leading
e-bank of Mongolia
CAPITAL BANK
Annual report 2015
OUR VISION
To be nature-friendly Green E-Bank that supports small
and medium sized enterprises (SMEs)
Business activities of the bank shall adhere to the acknowledged principles

of legal acts, ethical requirements to maintain preferable strong and stable
business ideology.
We will honor the rights of our correspondent parties, abide by the
principles of fair competition, respect their core values, and implement
the companys social responsibility program in order to contribute to the
development of Mongolia.
Shareholder, Members of the Board of Directors and Executive management

team shall implement the corporate governance, proper management rule
and ensure transparency and openness.
We will respect rights and freedom of employees by implementing a

proper human resource policy and compound conditions to ensure they
work in healthy, safe environment, and esteem opinions and desires of the
collective and individuals.
We will accept requests of all our esteemed customers with kindness and
fulfill it promptly and expediently.
CAPITAL BANK
Annual report 2015
MESSAGE FROM DIRECTOR OF THE

BOARD OF DIRECTORS
CAPITAL BANK
Annual report 2015
MESSAGE FROM DIRECTOR OF THE BOARD OF DIRECTORS

First and foremost, at this time of performance review of our bank for the year 2016, I would like to express my sincere
gratitude and greetings to our colleagues, esteemed customers, deposit holders, international and domestic partners for the
loyal continuous support and cooperationin maintainingnormal flows of banking operations. And I wish great success on your
future creative work on behalf of the Board of directors and its members. I believe that we can accomplish our objectives and
goals on business plan, expand our efficient collaboration, overcome economic recession with minimal loss and progress our
achievements in manufacturing, service and in all business sectors in coming year 2016.
The bank today has branches and units in all provinces of Mongolia, which was a significant step towards becoming national
bank and now it provides its over 500,000 customers with comprehensive banking services through its 90 branches and units
and 630 employees. In addition, foreign relations of the bank has been expanding continuously.
In 2015, within the framework of its mission to become Green e-bank, our bank has introduced Independent card system
to its operation in cooperation with international organization Compass Plus Inc in a short period of time. This had great
implication to the banking business.
The goal for the year 2015 was The year of Proper development and reform. As a result of our community directing their
efforts and implementing certain organizational measures, we were able to actively engage in a number of projects implemented
by the Government as well as other projects and programs within the framework of social responsibility policy. We were
able to overcome economic recession that was affecting all the entities and individuals without notable distress as a result of
successful collaboration with our customers, clients, business partners and were able to fulfill the targets set forth in the business
CAPITAL BANK
Annual report 2015
plan for the year. In the reporting year, for the purpose
of expanding foreign relations, we successfully received our
rating from International rating agency Moodys.
We are all aware that economic recession affected all the
entities of the country and it also caused difficulties for us
to implement major objectives set forth for year 2015.
Among others, fall in exchange rate of tugrik against foreign
currencies, halt in construction section and decrease in
income of individualsimpacted negatively on banking sector
deposits. This led to shortage in funds and slow-down in
business growth, which caused delayed interest payments and
impacted financial results of the bank.

Corporate governance practice has become the attention

around the world, and in this current situation where
the best methods of governance are in interest, we are
continuing successful implementation of contract concluded
between International Finance Corporation and the bank
which was initiated by the Board of Directors in order
to improve corporate governance, to reduce risk, to
promote profitability, to attract new investments. The
policy documents which are the principle source of good
governance have been reviewed to be newly revised and
amended. We encourage the bank colleagues to
implement the objectives for 2015 with dignity.
Last year, although it was under unfavorable condition, the

shareholders of the bank transferred MNT 20 billion funds
that were previously placed as share-convertibles, to shares.
As a result, charter fund of the bank reached MNT 53
billion, increasing by 72%.
SINCERELY,
DIRECTOR OF THE BOARD OF DIRECTORS:
BATBAYAR. T
CAPITAL BANK
Annual report 2015
MESSAGE FROM CEO
CAPITAL BANK
Annual report 2015
MESSAGE FROM CEO

I am kindly sending my greetings to the customers, employees, shareholders and board members of Capital Bank.
Reporting year was difficult year for the country due to negative indicators of the economics such as sharp decrease in prices
of raw materials, natural resources, downturn in economic development of Peoples Republic of China, decrease in foreign
direct investment, decrease in tugrik value and increase in foreign currency exchange rate. Due to these circumstances, banking
sector nonperforming loan deterioration worsened which posed risk to overall financial sector.
As for the banking sector, it was the year that International financial reporting standards, inspection principles and regulatory
instruments in line with features of sector operations were introduced. Total assets of the sector as of year-end amounted
to MNT 21.6 billion, which was 4.5% decrease as compared to the same period of the previous year. Relative economic
slowdown is due to banks emphasis on their asset quality.
At this critical period, within the framework of its goals to ensure stable position, to enhance competitiveness in the financial
sector and to sustainably advance with regular returns, Capital bank implemented a number of works and projects.
The bank, within the scope of its mission of Year for Proper development and reform for 2015, made reform in its
organizational structure in order to enable support to branch and unit operations in policy level and to improve profitability
of each unit and newly established Small and Medium enterprise department. Departments and units of the bank directed
CAPITAL BANK
Annual report 2015
their functions to implement strategic goal, to ensure bank

business growth, to enhance operational independence and
engagement. In the reporting year, the bank successfully
implemented a number of significant measures, projects and
programs and ensured continuous reform, innovation and
improvement of banking services and products. For instance:
- Introduced billing services

- Introduced e-bank new version
- Developed Smart bank new version
- Introduced independent card processing system successfully

- Became principal member of Visa International
- Received rating from Moodys and became the only bank
with STABLE outlook
- Newly introduced Herder and National savings-National
wealth deposit products
- For the first time in Mongolian market, introduced highclass Diamond card and Dual card with tugrik and
foreign currency accounts that can be used domestically and
internationally in cooperation with Unionpay international
- Introduced Co-Brand card for our pension and benefit
receiving customers in cooperation with Social insurance
general department.
- Introduced Mobile bank service that enables account
management and interbank transactions
For the reporting year, reputable and prestigious domestic

and international organizations evaluated the banks efforts
and deeds implemented for our customers and selected our
bank as the Best Commercial bank of Mongolia-2015,
TOP 100 entities, TOP 2 of banking sector, Best
social insurance premium payer organization.
In economic recession as current, Capital bank will work
hard to enhance corporate governance, ensure transparency,
esteem sustainable, reliable operations and continuously
advance by determining its future policy properly in order
to implement its mission to contribute to the development
of the country, to deliver the best financial services to the
customers.

I want to express my sincere gratitude to all our customers,

shareholders, members of the Board of directors and all our
staff for their efforts directed at implementing mission of the
bank.
SINCERELY,
CHIEF EXECUTIVE OFFICER
ARIUNBOLD. A
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CAPITAL BANK
Annual report 2015
CAPITAL BANK IN YEAR 2015
CAPITAL BANK
2015
11

In year 2015, all the units and branches of Capital bank directed their functions to implementing banking business growth
and strategic goals and to supporting branch and unit operations by policy to ensure operational independence and engagement on
the grounds its mission of Year for proper development and reform. Consequently, the bank successfully expanded its market
share in the reporting year.
Number of employees
Number of customers
634
Number of
e-bank users
Number of provincial
area branches and units
Number of card
users
39
Number of POS
machines
number of Mobile
bank users
Number of ATMs
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CAPITAL BANK
Annual report 2015
HIGHLIGHTS OF 2015
BEST COMMERCIAL BANK OF

MONGOLIA -2015
Capital bank was selected as the

BEST
COMMERCIAL
BANK
OF
MONGOLIA-2015
by
INTERNATIONAL
BANKER
magazine.
International banker magazine is choice of 50 some
thousand executives and management team of international
financial institutions from 80 countries. The principle
of selection process is to select the bank from best
commercial bank nominee banks on the basis of poll from
its 50 some thousand readers and 5 independent juries
with extensive, long-term experience.

TOP 100 ENTITIES OF

MONGOLIA
Capital bank was selected as

one of the Top 100 entities,
which is organized by Mongolian
National chamber of commerce and industry /MNCCI/
and Mongolian government
Successfully introduced card independent system and

now is enabled to directly work in contact with National
e-transaction center, improved service conditions to our
customers and increased number of card products.
MOODYS CREDIT RATING
Capital bank received <B3> credit rating with <STABLE>

outlook from Moodys international rating agency. This had
implications in advancing banking operations to the level
of other international banks, to cooperate with investors,
to enhance funding, to finance large projects and to be
accepted by leading banks.
PRINCIPAL MEMBER OF VISA

INTERNATIONAL
In addition to introducing independent

card system, the bank became principal
member of Visa international and
started to expand international payment
card operations and services
HERDER SAVINGS PRODUCT

LOTTERY CAMPAIGN
COOPERATION
With purposes of expanding foreign relations, the bank

started correspondent relations with Raiffeisen bank of
Austria and Sber bank of Russia
COOPERATION

CARD SYSTEM
The bank started to cooperate with Yeabit eye hospital

and Seran General Hospital and concluded agreement to
serve customers of Capital bank with preferential terms
DIAMOND CARD
Capital bank, in cooperation with Union

pay international, introduced Diamond
premium card for the first time in Mongolian market
Organized Herder savings product

lottery campaign for provincial area
and herder customers twice through its 90 branches
operating across 21 provinces located across Mongolia and
drawn 47 winners.
TOP 2 AT FINANCIAL AND

BANKING SECTOR GRAND EXPO
-2015
Capital bank was selected as

TOP 2 from financial and
banking sector Grand expo
2015 national festival. The
selection criteria is based on conclusions and votes of
public and it selects the best of the business and
finance sector.
CAPITAL BANK
Annual report 2015
SOCIAL RESPONSIBILITY
We have reflected in our core values to Implement

banks social responsibility and make contribution to the
development of Mongolia.

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Within the scope of these objectives, the bank has efficiently

implemented the social responsibility for the contribution
to development of the country and for the welfare of our
customers and citizens as well as our future generation.
Herein:
- Vision of the bank is to promote SMEs and to be national

level, nature friendly green e-bank. Within its vision, the
bank has implemented 30 some projects and programs
in the fields of protecting environment, developing SMEs,
decreasing poverty, improving living standards, improving
living conditions in cooperation with domestic and
international project implementing organizations and granted
about MNT 350 billion concessional loans to more than
9000 customers through all our branches and units.
- Organic Mongolia program, one of the major works

implemented within the scope of its goals to be green
bank that is environmentally friendly, that promotes green
economic growth and increases efficiency of natural resources
that are in line with future trends and development of the
country.
- Capital bank sponsors Capitals hockey team from

Mongolian hockey federation for their participation in
domestic and international contests. This year, the bank
sponsored following contests for the team:
Capital bank has been continuously cooperating with MNCCI,

organizer of the Organic Mongolia program for the long
term.
Within this program, the bank organized charity campaign

on 12th and 13th of September, 2015 for the purposes
of helping organic product manufacturers and advertised
organic products to the public, helped in harvesting the
greenhouse products.
Capital bank collective joined the activities of establishing
We can grow eco garden organized within this program.
We contributed to transforming area to the left of the
museum Bogd Javzandamba hugagt palace, last emperor
of Mongolia, into Eco garden to plant trees for heritage to
generations. The purpose of the campaign was to protect
historical heritage, to improve surrounding areas and green
houses, to establish standard eco garden in Khan-Uul district,
to establish comfortable rest area for tourists.

In the scope of contributing to the development of Mongolia
Capital bank has 20 some credit products and the following

concessional and project loans are granted within the
framework of social responsibility:
- Loans amounting to MNT 200 million were granted to total

of 32 creditors in year 2015 within the scope of Organic
Mongolia program
SPONSORSHIPS, DONATIONS, ASSISTANCE
- Capital bank joined MNT1000 campaign organized by

MN25 television channel for Burn center. The bank
organized this campaign among its 630 employees across
Mongolia and encouraged staff to join the good deeds.
Sponsored participation in International hockey contest

UB CUP 2015. For this contest, 2 teams from Mongolia,
one team each from Russia and Canada competed for Cup
and Capitals team earned the victory with 6:4 ratio with
the finalist.
Sponsored the teams participation representing Mongolia

in International hockey contest held in Hong Kong. Capitals
team took third place by rendering debut gameplay in this
Asian Championship cup.
- -In the scope of event Special Olympics World Games

held in USA where 14 athletes from Mongolia participated
for the first time from Mongolia, the bank selected Tulga
5 studio of Association of Mongolian individuals with
intellectual disabilities as producer team and sponsored
their visit in the Olympic games. Capital bank sponsored
the producer team to report World visually impaired
individuals festival.
- There was great damage to residents, animals and nature
from fire erupted in three eastern provinces. Capital bank
collective joined the humanitarian actions and donated
funds.
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CAPITAL BANK
Annual report 2015
- Made in Ulaanbaatar trade fair is organized by SME

support center every year for the purposes of marketing and
aiding in increase of sales for products of small and medium
enterprises. 140 some entities participated the trade fair
and Capital bank acted as a sponsor for nominations in
this trade fair for 9 selected Best SMEs by SME support
center.
- Capital bank participates as a sponsor for Youth exchange
program implemented by inter-governmental agreements
between PRC and Mongolia. The youth program finances
100 selected leading youth from Mongolia and 50 selected
leading youth from China, enabling them to get acquainted
with history, culture, economics and social lifestyle of the
host country.
- The bank, for the well-being of Mongolians, concluded

Memorandum of Understanding with Yeabit eye hospital,
leading eye hospital in Korea. Within the framework of
this MOU, customers of Capital bank are now able to
receive 10% discount from all the expenses served by this
hospital. Consequently, we now have established successful
cooperation with another Korean hospital Yeabit along with
Seran General hospital.
- In the scope of its 25th anniversary of establishment, Capital
bank organized FINANCIAL EDUCATION TRAINING
to students of secondary schools in center bank for the
purposes of providing with general banking and financial
education.
CAPITAL BANK
Annual report 2015
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MONGOLIAN SUSTAINABLE FINANCE PROGRAM
Around the world, everyone is agreeing on unattainability of providing with minimal commodities such as reliable food, safe
shelter and clean water that meets health requirements through conventional, traditional economic growth and development.
For instance, there is estimation that world population will reach 9 trillion by year 2050 and consequently, it is estimated that
water usage will increase by 30-85%, grain demand by 70-85%. Today, countries agree that conventional economy underlies
increase in risk in surrounding environment and society, depleting natural resources, worsening social discrimination.
In Mongolia, economic structure based on natural resources started to dominate since the beginning of 21st century and there
is tendency to depletion of energy sources, natural resources, surrounding environment and increase of greenhouse gas emissions with inefficient consumption, which are negatively impacting on the environment. At the same time, risk in increase of
poverty, unemployment, human rights violations, failure in labor protection, which further leading to loss of nomadic culture
and traditions are emerging as problems that need to be solved.
Capital bank signed Joint declaration on developing policy of Socially and environmentally friendly Mongolian Sustainable
finance on 21st of November, 2013 for the purposes of ensuring economic growth that is environmentally friendly, socially
aware to implement Sustainable development program of Mongolia with initiatives to sustain, to develop sustainably
without harm to the present and the future generations ultimately maintaining balance between economy, nature and social
development.

We started to employ a sustainable development specialist in Risk management department. As a result, today, each employee
of our bank is aware of sustainable finance. In this period, we developed our sustainable finance related policy documents
completely, approved of and have been implementing since then. We started to impose requirements directed at decreasing
negative impact to environment and society to our customers, implementing relevant standards in their operations and activities
in a sequential manner. The results have been shown to be effective.
HIGHLIGHTS OF 2015 IN THE SCOPE OF SUSTAINABLE FINANCING.
In order to establish basis for operations to be in line with determined

sustainable finance policy within the
Comprehensive system for Environmental
banking system, Green office, green
and social risk evaluation was established.
purchase instruction was developed
and approved by Resolution No.331
of CEO dated to 1st of April, 2015.
In addition, evaluation was made for total
of 192 loan applications and guidance, notices to decrease
negative impact of their actions on nature, environment and In-class training was given to 500 some emsociety.
ployees and job applicants in accordance with
internally planned training plan. 40 some documents were prepared and introduced.
With support from IFC and working
group of MBA, Sustainable financing
policy, Environmental and social risk
regulation have been approved by Resolution No.913 of CEO on 26th of
December 2014. Also in year 2015,
Environment and social risk regulation
was revised and updated. It is now being complied with in banking operations.
Created condition to get service

from the bank without having to
queue for mothers with infants and
disabled.
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CAPITAL BANK
Annual report 2015
CORPORATE GOVERNANCE
CAPITAL BANK
Annual report 2015
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CORPORATE GOVERNANCE

Corporate governance is a broad concept covering relationships

between not only corporate executive management, but also
shareholders, board of directors and other stakeholders.
Thus, we see that implementing good corporate governance
will enable economic growth and improve confidence of
investors and customers, provide with efficient monitoring
and surveillance system, establish balanced proper allocation
of authority and income. Therefore, we put great emphasis
on sound and good corporate governance principles.
In addition, in the scope of transparent reporting principle,
we report and publish our financial statements and operational
progress, ownership information on our website on a timely
basis transparently and on other medias such as internet,
phones, printed catalogs, TV and radios.
Directing the bank to good corporate governance principles

and ensuring transparency are core values that we, CAPITALs,
esteem and we will further commit to these principles strictly.
CODE OF CONDUCT OF CAPITAL BANK
Code of conduct of Capital bank was approved by resolution

of CEO on 10th of February 2015. Revised edition dictates
to strictly abide by the following principles:
- Confidentiality and reliability of the information shall be
highly ensured
- Money laundering and terrorism financing characteristic

activities shall be strictly avoided
- To be honest
- To avoid from presents, treats and similar
- To avoid conflicts of interest
- To have high financial discipline
- To follow and implement banking policy strictly
- To act properly at the office
2014 and since, has developed and approved of a number of

significant policies and regulation in regards to establishing and
cultivating good corporate governance principles. Among others
are:
- Dividend policy
- Policy on Conflict of interest
- Information security policy
- Compliance policy
- Regulation on delegated authority level of Capital bank
The above regulations and policies determine major
components of corporate governance such as introduction
of monitoring and surveillance system and methodology
internally for the purposes of ensuring non-discriminatory
equal addressing of shareholders, avoidance from conflicts
of interest in all levels of banking authorities, introduction
of monitoring and reporting system that prevents from
data loss to others, establishment of legal and regulation
implementation.
In addition, bonus and reward system was successfully
established in order to serve as incentive to fulfill obligations
properly and to encourage all level staff as BOD, Executive
team and all employees. Calculation of bonuses and rewards
are based on performance as well as progress in ethics.
As for Risk management department, the following tasks
are being implemented in the scope of introducing good
corporate governance:
- Researches and reports are introduced at Risk management
committee under BOD on a regular basis and from part of
the committee, guidance and direction are given on a timely
basis.
- Draft of Risk management integrated policy has been prepared
and is handed to BOD for approval on the basis of guidance
from BOD
- Regular risk assessment is conducted for operations that are

risk sensitive and we are working on determining capital
adequacy prudential ratios
- To act in public properly and abide by norms in regards
to political activities
- We have set goal to research and introduce international
methodologies that are publicly accepted such as Basel

Furthermore, in accordance with resolution No.
Accord guidance of risk governance and management and
A-151 by Chairman of Bank of Mongolia dating to 30th of
ISO 31000
September 2014, Regulation on implementing good corporate
governance for banks and Guidance on implementing proper
management principles for banks, Capital bank delivers reports - Business continuity plan was developed and approved of for
2016 and we are working to implement it
and information to the public regularly. Also in accordance
with Mongolian corporate governance codex, approved by
Resolution No 210 of Financial regulatory committee on 26th
of December, 2007, the bank ensures management system, limit
and difference between their rights and obligations are clear and
transparent.
- To utilize bank properties appropriately
The bank was evaluated by International Finance corporation in
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CAPITAL BANK
Annual report 2015
REGULATORY ENVIRONMENT AND OPERATIONS
The following tasks are being implemented within the

framework of proper implementation of Corporate
governance.
Performance and implementation of Department and unit
business plan, tasks assigned by committees are monitored on
a monthly and quarterly basis, incomplete performed tasks
are determined and complete implementation is ensured and
are discussed in Management committee meetings.
In the scope of anti-terrorism financing and money
laundering, transactions with amount equal to and above
MNT 20 million in tugrik and equivalent foreign currency
are monitored.
Trainings for the purposes of improving employees in

preventing from money laundering and terrorism financing,
to get to know the customers, reveal suspicious transactions
are given internally on a quarterly basis sequentially as well
as from external organizations.
Work reports dictating implementation of regulations and
guidelines are prepared semiannually to be introduced to
BOD committees, business plan implementation report of
departments and units are prepared on a quarterly basis
and reports on compliance of banking operations with
regulations and guidelines by regulatory bodies are prepared
semiannually.
INTERNAL CONTROL SYSTEM

Proper internal control system with the following five elements are introduced and followed in operations:
RETRIEVING
AND IMPROVING
MONITORING
OPERATIONS AND
THEIR DRAWBACKS
IMPROVING DATA
COMMUNICATIONS
CULTIVATING
MANAGEMENT
CONTROL AND
CONTROL CULTURE
IMPLEMENTING
CONTROL
OPERATIONS AND
FUNCTIONS
REVEALING,
DETERMINING AND
EVALUATING RISK
CAPITAL BANK
Annual report 2015
SHAREHOLDERS
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CAPITAL BANK
Annual report 2015
ABOUT SHAREHOLDERS

The major shareholder of the bank, BISHRELT GROUP LLC, is one of the Mongolian conglomerates that has been
stably operating for 20 years in the fields of banking and finance, investment, securities, real estate, trade and service,
manufacturing, health, construction and infrastructure.
TOGETHER FOR THE FUTURE AND THE DEVELOPMENT OF MONGOLIA
20
YEARS HAS BEEN OPERATING STABLY
14
SUBSIDIARIES
1700
EMPLOYEES
GROUPS VISION:

To be the company that contributes to the development of Mongolia, noticeably efficient to Mongolian nations, fruitful to our
shareholders, to be the strongest competitor and the best partner of leading corporations of Asia Pacific countries. This is main
ambition and aspiration of the Bishrelt group for the future mission. The group have reached the position that it holds today
by defining new ideas to implement the dream as its mission, by announcing the method to fulfill the mission as our slogan
and by working honestly and actively. Further the group will fulfill the vision with the best management solution to control
the speed of economic development, to ensure connection of theory and practice, activation of creative ideas.
GROUPS MISSION:
To honor the consumers, to introduce a new service and product that fulfill the customers satisfaction, and to contribute to
the development of Mongolian economy and social treasury by enterprising a promising manufactory based on intellects as
well as advanced technology.
BISHRELT GROUP is keeping pace with the global information era by using the best administrative management in production
and service, giving accelerated and quality service, preferring the knowledge-based environment of transparency, paying special
attention to the development of companys infrastructure and information technology, using the worldwide brand technologies
and software in its activities.
BISHRELT GROUP LLC joined the United Nation`s Global Compact in 2004 and has started to work in compliance with its
pre-figurative visions, informing them to public.
As a result of its business achievements and contribution of tax payments in state budget, Bishrelt Group LLC was awarded
by honorary title Best Entity of Mongolia issued by Government of Mongolia and Mongolian Chamber of Commerce for
11 consecutive years, in 2007 awarded by title Best of the Best entities of Mongolia, in 2013 awarded by title CACCI
Golden award cup of Asia and Pacific region best entities, and listed as one of the TOP-100 entities of Mongolia for 12
consecutive years which demonstrate its stable effort as being one of the best entities of Mongolia.
CAPITAL BANK
Annual report 2015
BOARD OF DIRECTORS
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CAPITAL BANK
Annual report 2015
ABOUT BOARD OF DIRECTORS

The Board of Directors /BOD/ has been newly assigned with 7 members on the shareholders meeting which was held
on 24th March, 2014. Two of them are independent members. The Board of Directors is consisted of highly skilled members
with masters and doctoral degrees in banking, finance and business management, rich experience in working for banking and
financial organizations and lecturing banking and finance theories to university students for many years.

Auditing committee, Integrated risk management committee, Remuneratio and Nomination committee were established within
BOD and detailed plans are made to be executed by monthly, quarterly and annually schedule for each committee, and the
members have completed their plans according to their respective responsibilities.
The discussing agenda for the meeting, the main method of BODs operation, were reflected in the annual plan with definite
period, and Board members were appointed for the meeting preparation and the meetings were creatively organized. The
meeting was held ten times during the reporting year, and the critical issues such as measures to be taken on shortcomings
identified by BOM inspection, implementation of program directed at staff sustainability and empowerment, information
technology security, internal audit conclusion on financial report verified by external audit, results of works implemented in
the fields of improvement of loan portfolio and operations of branches, monitoring and control of loan portfolio, and the
implementation of business plan were discussed. During the meetings, CEO, Deputy CEOs, directors of departments and
offices, as well as senior officers and other officers of the bank who are related to those issues have attended the meetings,
and recommendations and directions were given to the malfunctioning or works that are need to be attentive in the future,
and have been monitoring the performances. This resulted in constituting the banks normal operations, motivating the bank
colleagues and have been the stimulation of right direction to follow ahead.
BOD members make an on-site visit to the departments, offices and units, to hear the employees impression, and if necessary,
discussed some of the issues in committee meetings, attended the result discussion in Assets and Liabilities Management
Committee, Risk Management Committee and Internal Auditing Committee Meeting in order to give recommendations and
directions.
All the relevant regulations abided in the BOD level has been newly processed based on the advices of International Finance
Corporation and international best practices as well as reflecting the proposals of Board members and shareholders in order to
perfect the implementation of corporate governance principles which become another step towards good governance.
The Board of Directors has been working accurately with the shareholders and executives of the bank and has been ensuring
transparency of proper governance.
MEMBERS OF THE BOARD OF DIRECTORSAND STRUCTURE:
1. Batbayar. T - Bank advisor, Doctor of Economic Sciences

(Ph.D), Honorary Professor of National University of Natural
Economy and Law of Irkutsk city, Russian Federation.
2. Gookhuu. Sh - Head of the department of San

economic institute

3. Minj. A Finance specialist of Imperial international

finance organization
4. Nasanbayar. B - Senior professor of Mongolian National

University and elder officer of the bank
5. Undarmaa. B President of Bishrelt Group and shareholder
of the bank, Doctor of Economic Sciences (Ph.D)
6. Chinbishrelt. A Chief executive officer of Bishrelt LLC
CAPITAL BANK
Annual report 2015
EXECUTIVE MANAGEMENT
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2015
EXECUTIVE MANAGEMENT
Deputy CEO A.Gerelmaa
Director of Monitoring and surveillance department S.Butemj
Deputy CEO B.Yanjin
Director of Corporate banking department S.Delgertsetseg
Director of Human resources department B.Undarmaa
Director of Risk management department M.Oyuntuya

2015
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Director of SME department N.Ariunaa
Director of Business development department D.Davaadalai
Director of Branch management department B.Narankhuu
Director of Treasury department M.Bilguun
Director of Information technology department B.Purevsuren
Director of Financial accounting department Z.Munkhsuren
Director of Policy regulation department D.Badamchuluun
26
CAPITAL BANK
Annual report 2015
CAPITAL BANK
Annual report 2015
27
28
CAPITAL BANK
Annual report 2015
FINANCIAL INDICATORS
CAPITAL BANK
Annual report 2015
29
MAIN INDICATORS, QUARTERLY INCREASE, PERCENTAGE OF THE BANK BRANCHES
AMOUNT
SHARE OF THE MARKET
16.0%
14.0%
3.2%
3.7%
12.0%
2.6%
10.0%
2.0%
8.0%
6.0%
4.0%
2.0%
1.9%
2.2%
1.7%
1.8%
1.8%
2.9%
3.9%
2.2%
2.3%
2.7%
4.5%
3.1%
3.5%
1.7%
1.6%
1.7%
2.3%
2.7%
3.1%
3.8%
1.9%
3.5%
2009
2010
2011
2012
2013
2014
2015
0.0%
Asset
2.8%
3.9%
Liability
Equity Loan
During the years 2009-2015, market share of Capital bank has been constantly on the rise. Performances from 2009 compared to the year-end performance of 2015, its market share in Total asset increased by 1.6 percent, total liability by 1.8
percent, loan by 2.8 percent as well as deposit by 1.5 percent respectively.
CAPITAL BANK
Annual report 2015
30
CAPITAL BANKS BUSINESS OPERATION HAS BEEN EXPANDING YEAR AFTER YEAR

The main indicators of financial performance /audited, in MNT000/

Indicators
2012
2013
2014
2015
Total asset
325,597,450
554,916,618
817,441,837
745,603,358
Loan
198,086,427
310,952,250
490,839,049
544,793,498
Total liability
301,672,496
513,871,983
747,860,598
662,304,225
Deposit
114,405,060
226,170,741
324,957,560
346,572,313
Equity
23,924,954
41,044,635
69,581,239
83,299,133
Income
31,718,120
48,889,480
82,379,599
87,362,272
Expense
31,036,384
46,196,643
73,442,249
86,443,195
681,736
2,692,837
8,937,350
919,077
Profit

Due to the economic conditions, we focused more on quality of the asset rather than on the amount which led total assets to
decrease of 9 percent to MNT 745 billion as compared to the previous year. The deposit increased by 7 percent reaching
MNT 346.5 billion and amount of shareholders equity increased by 20 percent to MNT 53 billion.
In addition to this, the residue of non-performing loan being 2.3% in the total loan portfolio suggests that it is a relatively
good indicator compared to the average indicators of the Banking system.
LOAN RELATED INFORMATION

Overall result

Capital bank has granted loans of MNT 284.29 billion to 54,7 thousand customers in 2015, and compared to the last year,
loan portfolio has increased by MNT 46.14 billion, by 9.4%, reaching MNT 544.79 billion.
Indicators
2014
2015
Loans granted /Billion MNT/
364.66
284.29
Number of loans granted
24.668
36.717
Outstanding loan
490.84
544.79
Total loan portfolio is comprised of 40.35% to retail,

38.43% to SMEs, 31.22% to Corporate bank customers.
Retail
40.35%
SMEs
Corporations
38.43%
21.22%
CAPITAL BANK
Annual report 2015
31
RETAIL LOAN
INCREASE IN RETAIL LOAN PORTFOLIO:
In 2015, we worked aiming to increase the retail market through our branches and units in 21 provinces.
2014 182.59
Retail loan portfolio
Billion MNT
2015 216.81 18.7
Retail loan portfolio
B i l l i o n
M N T
Incresed in %
2301 PROJECT LOAN:
In 2015, we worked supporting the Urban development sector N2301 project C component of Asian development bank
Micro loan project for fresh water connection and improving housing conditions.
Individuals
project
2015 2301 306

Year
Allowed loan of MNT
3.9
billion
MORTGAGE LOANS:
In the setting of sub program Support for construction sector and stabilizing the housing prices, implemented by Government
in joint effort with Mongol bank, loan of MNT 20.82 billion has been granted.
20.82
2015
B I L L I O N
YEAR
M N T
L O A N
STARTED TO GRANT SMALL LOANS:
Capital bank has been granting Small loan for the 4th year to the business operators and household production operators
under the mutual agreement terms made with Ministry of Labor.
IN THE FIELDS OF PROMOTING SMEs:
Capital bank has set its vision as To be a green e-bank supportive of SMEs and in this respect, has been executing lots of
projects and measures. In 2015, Loan portfolio that was granted to the SMEs reached MNT 179.3 billion and increased by
4.7% from that of the last year and it suggests that we have worked by promoting our SMEs in this year of financial crisis.
COOPERATED WITH CREDIT GUARANTEE FUND:
We have extended our cooperation with the credit guarantee fund for the purpose of increasing financial capability required
for the SMEs business operations, promoting employment and ensuring the sustainable income of the civilians by supporting
business operators lacking collateral.
Maintained the increase in the loan portfolio in 2015 (%)
208.8
CORPORATE BANK LOAN PORTFOLIO
BILLION MNT
38.9
TOTAL LOAN PORTFOLIO
Increase from 2014 to 2015 (%)
12.1
CORPORATE BANK LOAN PORTFOLIO
BILLION MNT /INCREASE/
6.2
TOTAL LOAN PORTFOLIO
32
CAPITAL BANK
Annual report 2015
HUMAN RESOURCE MANAGEMENT
CAPITAL BANK
Annual report 2015
33
HUMAN RESOURCE MANAGEMENT

Employees with competitive education who are highly skilled

with banking and financial sector experiences whose work
performance and productivity are high and leaders with
high ethics who are respected among colleagues are valuable
factors of our banks competitiveness. We aim to constitute
a community of individuals who are stable, sincere, honest
and proud of the bank as our mission states by implementing
multilateral policies and programs that promote each
employees contribution, by focusing on their training and
development and by solving their social issues.
1. Within the framework of the banks mission to be closer to

the customers, to increase the banks branches and to have
extensive network, we have created new jobs and supported
employment.
We have set goals in stages to achieve these aims and have

been organizing diversified and wide range of activities. For
instance:
2. Capital bank has worked by determining the proficiency and

competence of the employees of its branches and units,
with its results, determined the needs of training and added
competence to our employees. By arranging this work, we
were able to provide the following opportunities to our
employees.
- By the end of 2015, two new branches have been newly

established in Ulaanbaatar and in regional area. Capital
bank ranks 4th among commercial banks in the number of
branches and units, and promoted employment by creating
new work places.
- Professional proficiency test given among the 300 employees

working as cashiers at branches and settlement centers of
Capital bank and given assessment.
- Worked focusing on determining professional proficiency
of the employees, determining whether the employee is
suitable for the position and arrange their training courses
on research basis and increase their work productivity.
- Arrangements relating to Labor relations in accordance with
the Mongolian labor Law were made to discover competent
and qualified employees and get them promoted also increase
their salary.
3. It has been a year specially focused on the human resource
selection and clearance operation. For instance:
- We have made radical changes starting from Teller
selections, the banks primary or business processing unit, by
implementing new method Assessment Center of hierarchy
selection. The implementation of this new method develops
the selection process more efficient by setting precise
criteria in each stage, holding strong competition among the
candidates which creates the opportunity to fairly evaluate
their skills from the group. As the Teller selection process
becomes adequate and efficient, the advantageous opportunity
is consisted to implement the policy to promote the officials
to the next level from teller position, such as; senior teller
or financier. The bank has conducted employment selection
6 times and 86 tellers were specially prepared in trainings.
They were apponited in branches across Ulaabaatar city area.
4. Human resource training and development programs are
being systematically implemented. For instance:
- We are aiming to increase work performance and productivity
of our employees by increasing each employees efficiency
and improving their convertibility. Within this aim, we have
developed and have been implementing Integrated training
policy.
34
CAPITAL BANK
Annual report 2015
- Banks internal trainings and programs constitute major 6. Right software solution or Human resource information
part of the Integrated training policy and plan. Internal
system is an important tool for promoting the systematic
departments organize trainings regarding their operations and
policy and multilateral operation of human resource. Within
actively participate in improving the branch staff and their
this framework, we have introduced the integrated human
discipline training.
resource information system Green ERP program. For
instance:
- The human resource department has internally organized
Instructor training for the department staff within the - We have adapted to this new software for accounting the
framework of this policy.
salaries or similar revenues of our banks total employees
with accurate and timely manner, as well as providing these
information to each employees in advance. We will further
- -The bank, in 2015, in duplicate numbers 1832 person/
aim to constantly improve this sector and work effectively.
one day of training course and course for total of 1863
employees were organized. About MNT 25 million for
2014, about MNT 50 million for 2015 were spent and - With the help of this program, we were able to fulfill the aims
planned to spend over MNT 60 million for 2016. In other
such as simplifying the work cohesion between management
words, the bank aims to be the bank that contributes to the
and employee and between their superior management, third
development and learning of its employees, supports their
party participant, and mutually exchange thoughts as well as
intellectual investment and to be employee-friendly one.
save time and paper use. In 2015, with the sole use of the
program not wasting any paper, we successfully managed to
perform Workplace requirement and employees proficiency
-In order to support the employees to develop and to work
assessment and Career development program and Work
progressively, many programs are being implemented. For
performance assessment.
instance, New employees adaptation program, Program
to improve managerial skills and Career development
program for branch employees are among the activities.
5. Policies to retain human resource, to increase their salary or
similar revenue, fairly evaluate their performance, to create
optimal remuneration system and to resolve their social issues
are constantly implemented in stages. For instance:
- Position level and salary rate suitable for the position level
and standard salary system is applied on the employees of
departments and branches of the bank, and this system is
being sophisticated.
- In order to retain our employees, we have been applying
increment for the serving year as a continuous tradition.
- We have developed and started implementing two types
of regulation for incentive system: Performance evaluation
of the banks department employees based on the target
compromising principle and Performance evaluation of the
branch employees based on the Plan implementation, actual
quantitative performance and actual contribution evaluating
principle. These procedures are intended to assess the
employees performance and to create the corresponding
bonus and incentives and to inspire the right passion and
motivation to every single employee. The employees
performance have been assessed since 1st quarter of 2015
and thus implemented the system that connected assessment
of work performance to incentives.
Within this setting,
incentives were allowed to 190 employees in duplicate
numbers at about 20%.
- In order to resolve a part of social issues of our employees,
we have been implementing regulation and programs of
grants, allowances and other benefits, as well as, we have
granted our employees consumer and mortgage loans with
concessional terms.
CAPITAL BANK
Annual report 2015
RISK MANAGEMENT
35
36
CAPITAL BANK
Annual report 2015
RISK MANAGEMENT
Corporate governance plays an important role for implementing risk management, and our bank has cooperated with
International Financial Corporation in governance sector. We have implemented the risk governance in accordance with their
advice and defined as following;
BOD-Integrated risk
management committee,
Auditing committee
Risk management
Risk management
committee under
department, Internal
auditing department
Business entities
Risk oversight, to
To implement the scope
To determine the risk
To determine risk,
Responsible for
approve the scope of risk
of risk management
limit in the scope of
evaluate, make stress test,
transactions and everyday
approved risk appetite
monitoring, reduce risk
risk management
management
level and accepting level
In 2015, economic condition was poor and recessed indicators of the money and financial sector have been a big challenge
for the decision makers and business operators. Capital bank has insured financial stability and increased profitability by successfully conducting the external and internal risk management in the transformation of key performance of macro and micro
economy.
In 2015, we have successfully managed to improve the

information pool of the business operation at bank extent
to automate the risk monitoring and auditing operation, to
manage risk effectively and reduce the potential risk that
may affect the productive operation of the bank.

Risk management has been implemented across all of the

banks fields and focused on determining the incidences
and factors for the occurred and/or potential risks, reducing the risk, do monitoring, cooperating in prevention
measures and introduce the risk culture to the bank. For
this purpose, improved and developed the accomplishment
of the process of doing risk monitoring and extend its risk
information pool by newly introducing Risk management
program to extend its risk information pool.
And also, we have studied the prime experience of risk

management and introduced into our operation the documents and standards created by the foreign regulatory
institutions. For instance, international standard of financial
statement such as Basel III, ISO 31000, COSO 2004
could be mentioned
RISK MANAGEMENT OPERATION OF THE CAPITAL

BANK HAS BEEN ACCOMPLISHED IN THE FOLLOWING STAGES
5.Creation of pool
for risk information
and do the
monitoring
1.Determination
of the risk
environment
4.Management
of the risk
2.Identification
of the risk
3.Assessment
of the risk
At Bank level, we have set a goal of assessing the level of integrated risk of operation and improve the cooperation and coherence of the branch and departments accomplishing the risk management, and introduce the risk culture at bank level.
CAPITAL BANK
Annual report 2015
INFORMATION TECHNOLOGY
37
38
CAPITAL BANK
Annual report 2015
INFORMATION TECHNOLOGY
\ We have done constant research and approaches of
information technology based on the continuous reliable
operation of the information technology and business policy
and introduced new products and services, ensured the
automation of its operational quickness and formed proper
management and monitoring system of the information
technology.
1. In the setting of ensuring the safe and reliable operation of
the information system to enable the continuous operation
of the banks daily operation:
- Introduced Solarwinds Orion, the integrated system, into
our operation, which monitors the normal operation of the
network, program and servers.
Introduced a software that enables payment of Customs

settlement online for 24 hours round by making online
connections to Customs General Administration that makes
settlements of customers
- Without time delay from the customs payment settling banks,
made the settlement of customs payment possible by getting
access to the Customs E-payment program online using
Grapebank program.
3. In the setting of forming independence by improving the
software, the following report and softwares were processed
and introduced in the operation.
- Introduced monitoring system of database into our operation.

IN THE COURSE OF PROCESSING SOFTWARE:
Introduced in our operation the system that enables
automation of daily monitoring process that communicates -
2nd version of Helpful news
news and information in the form of e-mail, message and
report in a prompt manner.
- 2nd version of Insurance program
2. In the setting of work to studying and introducing products
- 2nd version of Internet bank program
and services of advanced technology based on the information
technology trend:
- Electronic registration program
- Newly introduced system Active director 2012.

- VAT information exchanging program
Introduced a system that manages under the same integrated

- Mobicom, Unitel mobile bank program
control the computers used at the bank level to ensure their
accessibility and safety.
- Mobicom, Unitel special number service
program
Introduced a server that enables saving and storing the file at
bank level and provides advice and instruction to the overall
- Mobicom, Unitel, Univision payment
employees.
information exchanging program
- Introduced in our operation the Billing program.
- Information control program of Social

Welfare allowance
Introduced in our operation the software that enables the

automation of the settlement by integrating the invoices from
- Card registration program
Biller institutions and connecting them to bank main system
and submits the information of payment transaction of biller
- Program for transferring loan information to
institutions. Settlement is carried out as per the following
MIK
billing invoices.
- Electricity bill
- Apartment bill
- Apartment maintenance fee
- Internet bill
- Cable TV bill
- Water channel public corporation bill
- Cell-phone operator bill
- Customs electronic bill
4. In the setting of introducing good governance of information

technology, improving reliability and control system of
information technology and ensuring proper management:
We have been researching Cobit 5.0, the governance
system of institutional IT, and planning to introduce it
into our operation. With the introduction of the system,
the proficiency of IT moral, culture, principle, policy,
organization and management process, proper governance
and management will be achieved. The introduction of the
system is scheduled within the 3rd quarter of 2016.
CAPITAL BANK
Annual report 2015
TREASURY MANAGEMENT
39
40
CAPITAL BANK
Annual report 2015
TREASURY MANAGEMENT
MONEY MARKET
In year 2015, Capital bank placed banks reserve funds in

highly liquid, low-risk assets such as securities of Bank of
Mongolia, Government securities, bonds and deposits with
other banks in order to ensure that it is able to make
settlements of customers on first request and for investment
purposes. Also, actively took part in operation of selling
Mortgage loan portfolio being implemented by government
to Mongolian Mortgage Corporation and thus took possession
of ordinary bonds as MMC-4, MMC-5, MMC-6, MMC-7
PHYSICAL GOLD TRADE
Capital bank received its license of physical gold purchase

in 2011 and in order to increase the number of physical
gold trade customer entities and individuals and to work
closely with them, the bank has started to grant gold-backed
business loans, gold advances, to provide customers with
financial information and prolonged gold-purchase schedule
time, which aided in increase of profit for the year. In
2015, though the gold price was in the high risk, unstable
condition of the market due to factors such as decision on
the policy of the interest rate of US Federal Reserve bank,
downturn in the capital market of China and uncertainty
of geopolitics, we had a year of constant rise in profit and
income thanks to our correct decision and prognosis.

CURRENCY TRADING
Capital bank, in 2015, has worked fulfilling our customers

needs for currency trading through our 90 branches and
units. Capital bank offers its currency transacting customers
the rate negotiating service in 13 types of currencies in
order to bring closer the global market rate. Capital bank
has been actively running trades of financial derivatives such
as forward and swap with individuals and corporations
FOREX TRADING
Capital bank first received its White label service licenses in

an official manner from leading online forex company Forex
Capital Markets, or FXCM, in 2011. By introducing the
service, the bank was able to cut margin account minimum
balance of customers that is maintained for the purposes of
participating in FX, CFDs, Precious metal and commodity in
international markets and provided with opportunity to trade
1:200 margin trading leverage of owners equity capital.
Also, the bank performs transactions of cash replenishments,
account debit and credit in a prompt manner. Therefore,
compared to 2014, the number of margin trade participants
was increased to 40 percent and 70 percent of the trade
participants has 3-5 years of experience in the field.
TRADE FINANCE, INVESTMENT
CREDIT RATING
Capital bank, for the first time, had International rating

institution Moodys to execute credit rating. This is a special
operation that opened many opportunities such as operating
business like the other banks at international extent,
cooperating with investors for drawing fund, financing big
projects and being accepted by the superior quality banks.

PROJECT LOAN
Supporting SMEs is socially and economically significant. For

this reason, through our policy, we are working to support
national production and SMEs and business operator in an
effort to contribute to the Mongolian economy.
FEATURED PROJECTS AND PROGRAMS OF CAPITAL

BANK
For the bank, the following projects and programs have been
successfully implemented and the loans have been granted to
the specific groups. For instance:
- Loan with foundation discount for developing the

capital citys SMEs.
- Market and pasture management development

project Womens goup loan

- Green program Organic Mongol micro loan
- 2301 project C component for Urban

development sector of Asian development bank
namely Micro loan project for the improvement
of fresh water connection and housing conditions.
Capital bank has been actively organizing the above mentioned

projects and programs and implementing them successfully.
CONCESSIONAL LOANS FROM CAPITAL CITY SME

DEVELOPMENT FUND
Capital city SME development fund is aimed at supporting

the operators of SMEs, increasing the product manufacturing,
renovating the production equipment and technology and
creating new work places. Our bank has been working with
this fund in accordance with agreement since 2014 and in
2015, three times of candidate selection was conducted
and loan was granted in the amount of 1.8 billion to
12 corporations and individuals in milk and milk related
products, 1.5 billion to 23 SMEs, MNT 985 million to
7 corporations in fishery, pig and bird industry. The main
feature of this project is that it provides loans to those
corporations and individuals based remotely from the Capital
city for developing and extending the intensive livestock
husbandry. The loan turned to be an investment that directly
supported the intensive husbandry which is supposed to
develop following the city and settlements.
CAPITAL BANK
Annual report 2015

MARKET AND PASTURE MANAGEMENT DEVELOPMENT

PROJECT
Operation of Market and pasture management development

project started implementation since December, 2011 as
per the Agreement of Project Finance entered into between
Mongolian Government and International Foundation for
Development of Agriculture of the United Nations. Market
and pasture management development project, funded by
International Foundation for Development of Agriculture of
the UN and Global environmental fund in the form of a
grant aid, aims to contribute to increase the income of
the people of regional area and constantly improve their
subsistence.
The project consists of two main components and capital

bank is cooperating with one of them component Market
development.
Market development component has the following sub
components:
- To get involved in the loan for developing micro business and
loan guarantee service. In the setting of this sub component:
12
womens group
116
Million MNT
loan allowed
- To have connection to independent fresh water line,

- For the improvement of the housing conditions, purchase
of energy saving stoves, making insulation for the heating of
the house, to extend house, to buy and install the waste line
equipment and make internal and external restoration.
- To newly build a heat saving private house,
- To build a house and street for the household leading
women with low income,
17 249.5
billion
For the improvement
of the housing conditions 134 1.43 MNT
billion
For building heat
2.15 MNT
saving house 147
To be connected to
independent fresh water line
763

URBAN DEVELOPMENT SECTOR 2301 PROJECT

C COMPONENT OF ASIAN DEVELOPMENT BANK
MICRO LOAN PROJECT FOR THE CONNECTION TO
FRESH WATER AND IMPROVEMENT OF HOUSING
CONDITION
In the setting of project Urban development sector

MON2301 C component being implemented by Mongolian
Government with the finance from the Asian Development
bank, loan covers the improvement of housing conditions
such as the installation of fresh and waste water lines and
energy saving stoves and the ceiling, wall roof insulation for
60

million MNT loan was

allowed respectively,
302 1098
THROUGH
BORROWERS
Corporations
and individuals
million MNT guarantee

loan was allowed
Million
MNT
individuals
For building standard street
- To allow loan guarantee. As per the project documents,

guarantee service of 40-80 percent of guarantee is provided
to the loan receivers in the project.
Capital bank
Capital bank has finished allowing its overall finance within

the contract date and it can be shown as follows in the
product type:
Million MNT
finance allowed
2015 110
For the purpose of this project, within the scope of business

plan arranged by our bank, the following main loan products
have been introduced.
individuals
individuals
200.0
Bulgan
Province
ger district households of Altai, Arvaikheer, Bayankhongor,

and Erdenet. The sub-lending agreement with the finance
fund of USD 2 million was entered into between Mongolian
Ministry of Finance and Capital Bank dating to November
19th, 2014.
individuals
- To develop Value-Added network. The main operation of

this sub-component is to make bridge between the raw
materials and product producers of soums and bags as well
as big producers and buyers of the regional area and city.
Thus, in the scope of this work, in the two stage work of
JICA for developing SMEs and conservation of Environment:
41
Individuals benefited from the project
This project, being implemented by International institution,

is of great significance to the development of the provincial
and regional area, so Capital bank arranged Project
implementing working group in order to get most out of
the project at 100%.
The fact that the working group had worked from the
beginning till the end of the project had its toll on the
successful accomplishment of the project. In other words,
for the whole loan, it was special in that it required working
face to face and support their activity and took a lot of
time in cooperation. Loan underwriting team had to work
with acute precision and with proper time management as
there they were short in time. As a result of the work, loan
finance of USD 2.0 million dollars have been successfully
granted,
42
CAPITAL BANK
Annual report 2015
INTERNATIONAL COOPERATING
ORGANIZATIONS
BEST PARTNERS
CAPITAL BANK
Annual report 2015
CORRESPONDENT BANKS
CORRESPONDENT BANKS
RAIFFEISEN BANK INTERNATIONAL AG
LOCATIONS
43

1-55.097.802 /EUR/
VIENNA 1030 CIENNA AT AUSTRIA
AT703100000155097802 /IBAN/
30111810000000001626 /RUB/
INTERNATIONAL BANK FOR ECONOMIC

COOPERATIVE OPERATION
MASHA PORYVAEVA STREET, 11 MOSCOW, RUSSIA,

GSP-6 107996
30111840300000001626 /USD/
30111978900000001626 /EUR/
30111826900000001626 /GBP/
BANK OF TOKYO MITSUBISHI UFJ LTD
KOREA EXCHANGE BANK 100 793
7-1 MARUNOUCHI 2-CHOME, CHIYODA-KU TOKYO

100-0005 TOKYO JAPAN
635-0467650 /JPY/
181 2-KA ULCHI-RO, CHUNG-KU, SEOUL 100-793

KOREA, REPUBLIC OF
0963-THR-050560010 /USD/
181, EULJIRO 2GA, JUNG-GU, SEOUL 100-793, KOREA
0963-THR-050560109 /AUD/
CHINA CONSTRUCTION BANK
011100 6 QIAN JUN ROAD ERLIANHAOTE CHINA
INDUSTRIAL AND COMMERCIAL BANK OF

CHINA
010020 JIAOXUE HOTEL FLOOR 1 1 ULANQIAT EAST

STREET HUHEHAOTE CHINA
AGRICULTURAL BANK OF CHINA
NEIMENGGU BRANCH, HUHEHAOTE, CHINA
BANK OF INNER MONGOLIA
33 TENG FEI ROAD, HUHHOT, INNER MONGOLIA,

P.R.CHINA 010020
0963-FRW-001000082 /KRW/
NRA15014150500220100345 /USD/
15001658408052502696 /CNY/
0610040629200094456USD
0610040629200094580CNY
05999914040000130 /USD
05999901040000145 /CNY/
001114236000000161/USD/
201101236000000142/CNY/
TRY IBAN:
TR840014300000000001042664
AKTIF INVESTMENT BANK A.S.
BUYUKDERE CAD. NO:163 ZINCIRLIKUYU 34394 SISLI

ISTANBUL
USD IBAN:
TR030014300000000001042667
EUR IBAN:
TR600014300000000001056773
10
BANK OF CHINA
1 FUXING MEN NEI AVE, 100818 BEIJING, CHINA
778400002965 /USD/
11
SBER BANK
19 VAVILOVA ST., 117997 MOSCOW, RUSSIA
/RUB/
12
KOOKMIN BANK
SEWOO BUILDING FLOOR 9 10, YEOUIDO-DONG,

YEONGDEUNGPO- GU,
843-8-USD-01-8 /USD/
843-8-KRW-01-0 /KRW/
MEMBER ORGANIZATIONS
MEMBERS
LOCATIONS
ASIAN BANKERS ASSOCIATION
14F, NO. 11 SONGGAO ROAD, XINJI DISTRICT, TAIPEI 11073, TAIWAN
VISA INTERNATIONAL
19F, OCI BUILDING 94, SOGONG-RO, JUNG-GU SEOUL, KOREA 100-718
UNIONPAY
BUILDING B, POLY PLAZA, 6 DONGFANG RD. PUDONG, SHANGHAI, 200120, CHINA
COMPASS PLUS
68 LENIN AVE 455044, MAGNITOGORSK RUSSIA
44
CAPITAL BANK
Annual report 2015
MONLABEL LLC
DENIMON LLC

Denimon LLC /denim is the main material for making
jeans/ was established in May, 2009. With support of finance
by Capital Bank, the company has upgraded its equipment
of jeans industry and now it maufactures high quality design
of jeans, tailoring and washing. The company has developed
Mongolian denim brandUrban Jeans successfully.

Mon Label LLC was founded in 2004 and has been
cooperating with Capital bank since 2007 for supply of all the
financial needs. As a result of cooperation with Capital bank, it
has become the first company in press sector that has purchased
printing machine PW-260-R6C from LABELMEN MACHINERY LLC
of Taiwan in December, 2007 which meets international standard
in packaging, high-tech, and high capacity. With support of Capital
Bank, the company installed printing machine LABELMEN PW-460R6C, which has 2 times more capacity as compared to previous
equipment and as a result, reliable operation and efficiency of the
company hasimproved. Therefore, workplace offers were doubled
and it is now able to distribute high quality labels in domestic and
foreign markets.
NYAMSULD LLC

In 2001, Nyamsuld LLC started its stable continuous
operation of heat insulated windows and doors production. Since
2008 the company has been continuously cooperating with
Capital Bank. With support of project finance from Capital
bank, the company upgraded equipment and devices with a
production capacity of 50 to 70 sq.m windows and doors daily.
The Company uses products and plastic material needed for
producing high quality window from worlds leading brands
such as Germanys Kommerling and Silverline, lockage
and hinges from Australian MACO and Germanys WINK
HAUS, padding rubber from Germanys EPDM.
TUMEN TOOROIT LLC

Tumen Tooroit LLC was established in 2011. Since its
establishment, the company has been cooperating with Capital bank.
The company performs operations in fields of hog farm in territory
of 13th micro district of Khan-Uul district. With support of project
finance from Capital Bank, the company is currently operating with
2000 some pigs to provide the residents of Ulaanbaatar area with
healthy meat and meat products.
SHAR NARST LLC

DORNIIN TSAS LLC

Dorniin Tsas LLC was established in 2006 and has
been cooperating with Capital Bank since 2013. With support
of project finance and business loan by Capital Bank, Dorniin
Tsas LLC established industry of lightweight aerated concrete
blocks in August, 2014. The industry has capacity to produce
200,000 m3 blocks annually and its main purpose is to maintain
50 percent of block utility in Mongolia.

The company has been operating in the fields of gold
deposit exploration and extraction activities in mining sector since
2001. Since 2002s, the company has been cooperating with
Capital bank. Sharnarst LLC is currently working on gold-digging
in Mandalsoum, Shariingol, of Selenge province, Selenge soum of
Bulgan province, and Tushig soum of Selenge province in accordance
with special license for use of gold reserve. Shar Narst LLC is
reputable company in mining sector and was awarded as the Best
entity of Mongoliawith rehabilitation in coal mine of Shariingol.
CAPITAL BANK
Annual report 2015
CAPITAL MARKET CORPORATION SC LLC
45
46
CAPITAL BANK
Annual report 2015
CAPITAL MARKET CORPORATION SC LLC
CAPITAL MARKET CORPORATION LLC, with joint investment of Bishrelt Holding LLC and Capital bank, has received its
Underwriting, brokerage and dealer licenses on 21st of April, 2011 from Financial Regulatory commission in accordance with
the resolution #118. The company provides its customers with capital market services and contributes to the development
of financial and capital market of Mongolia. In year 2011 when the company was first established, it started the business
successfully trading MNT 18.0 billion on Mongolian Stock exchange.
MISSION:
The mission of Capital market corporation is to become market-leading company with the best marketing that provides with
comprehensive capital market services like broker, dealer and underwriter services to domestic and international organizations
and domestic and foreign individuals which contributes to the capital market development of Mongolia.
OBJECTIVES:
To strengthen the company staff and conduct operations continuously and smoothly, to improve services and raise public
awareness

To conduct research on electronic brokerage services and introduce accordingly thus providing domestic and foreign individuals
and organizations to participate directly to securities trading.
As for the dealer operations, to generate yields and profit on short term and medium term, to ensure securities portfolio with
good liquidity.
To assist organizations to raise capital by financing methods such as IPO, SEO, DR, RTO etc that will aid them to expand,
to act as an underwriter in order to improve the quality of company capital
To introduce Marketing mix 9P to the operations of the company and improve the companys marketing operations
Capital Market Corporation LLC was selected as one of the Trusted 4 dealers of Mongolian stock exchange in year 2015.
The company places bids and asks of Government securities everyday on MSE trades and thus improving access to the securities
and providing the customers with opportunities to purchase government securities or to repurchase them before the payment
term, thus increasing primary and secondary market liquidity.
Capital Market Corporation LLC is a member of Association of Securities Dealers of Mongolia, Mongolian Stock exchange and
conducts operations in accordance with the regulations of Financial regulation committee and applicable laws and regulations
of Mongolia.
Capital Market Corporation LLC provides services of purchasing and selling securities in Mongolian stock exchange as well as
international stock exchanges and is working to introduce new products to capital market, to assist companies raise capital, to
conduct transparent operations to investors that are in line with international standards of corporate governance.
CAPITAL BANK
Annual report 2015
OUR MISSION FOR 2016
47
48
CAPITAL BANK
Annual report 2015
OUR MISSION FOR 2016

Over the past years, the bank has been maintaining sustainable growth. However, economic downturn faced by Mongolia is
affecting negatively on all business sector, especially banking sector growth, and is expected to continue in 2016. Although
business operations of the bank customers are suffering due to this economic recession and it is negatively affecting on
sustainable growth of the bank, Capital bank will pursue strategy to overcome it by going along with our loyal customers.
According to the natural law of obtaining progress and development after each challenge, we sincerely believe that we can
establish business growth and development of our customers with collective force after successfully overcoming difficulties.
Economic recession, on the one hand, is posing difficulties and challenges on business operations while on the other hand, opens
path to opportunities that were overlooked in the past. Therefore, in 2016, the bank will focus on quality of products and
services delivered to the customers, internal operational processes, disciplines, workplace culture and responsibility of employees
as well as corporate governance.
Thus, on the basis of International and domestic economic conditions, banking performance, we have determined the goal for
year 2016 as Year for improving productivity and sustainable development. We will implement the following objectives in
year 2016 in order to successfully reach our goal:
MAIN OBJECTIVES FOR YEAR 2016:
Cultivate proper corporate governance and improve it
Implement integrated risk management and cultivate risk management, culture in all levels of organization
Implement proper management focusing on quality of loan portfolio, improve monitoring in all levels of credit
operations, maintain overdue loans at level no more than system-wide level.
Constitute funds by expanding international cooperation and issuing LCs, guarantees, warranties, bonds offshore,
opening credit lines in banking and financial organizations, issuing certificate of deposit
Turn and develop all banking operational processes into e-version and automatize all the necessary reports
Deliver e-banking services as well as traditional and nontraditional banking services to customers on a timely
manner regularly and without errors, improve knowledge and skills, disciplines and responsibility, creativeness and
engagement of all employees, cultivate high service culture in day to day operations
Direct banking operations to improve banking product and service sales, quality and culture of services, increase
number of customers, ensure their satisfaction, activeness and return on the basis of active operations of banking
business units, its relations and support from other units, proper management, disciplined requirements and
relationships of all the managers of the bank.
3
4
5
CAPITAL BANK
Annual report 2015
LOCATION OF BRANCHES AND

UNITS, ATMS
49
50
CAPITAL BANK
Annual report 2015
BRANCHES AND UNITS IN ULAANBAATAR CITY

CENTRAL BANK
Capital bank head office, Sambuu Street 43, Chingeltei district,
Ulaanbaatar city
Tel: 70001912; Fax: 310833
Monday-Friday 09:00-18:00; Closed on Saturday and Sunday
ARD BUSINESS CENTER
No. 02 of Bldg#23 at the opposite side of the BOM
Khoroo#1, Chingeltei district, Ulaanbaatar city
Tel: 70002046
Monday-Friday 09:00-21:00; Saturday 10:00-20:00; Closed on
Sunday
KHAN-UUL BUSINESS CENTER
At the opposite side of Atar Urgoo Share holding company road,
Chinghis Avenue, Khangai university bldg, Khoroo#3, Khan-uul
distict, Ulaanbaatar city.
Tel: 96119914;
SANSAR BUSINESS CENTER
Bldg#2, North-upstream to the Bayantseel trade center,
Khoroolol#15, Khoroo#7, Bayanzurkh district, Ulaanbaatar city
Tel: 70079023;
BAGA TOIRUU BUSINESS CENTER
1st floor, 2nd building of Government G cabinet,Baga toiruu,
Khoroo#4, Chingeltei district, UIaanbaatar city
Tel: 70079018; Fax: 70079018
NAIMAN SHARGA BUSINESS CENTER
Bosgot urgoo LLC bldg, Naiman sharga trade center, Chingeltei
district, Ulaanbaatar city
Tel: 96115047
Monday-Friday 08:00-20:00; Saturday and Sunday 09:00-19:00
SETTLEMENT CENTER OF NAIMAN SHARGA BUSINESS
CENTER /HEAD BRANCH/
Capital bank head office, Sambuu Street-43, Chingeltei district,
Ulaanbaatar city
Tel: 70001912; Fax: 310834
NARANTUUL BUSINESS CENTER

Narantuul International market, Khoroo#14, Bayanzurkh district,
Ualaanbaatar city
Closed on Tuesday, Wednesday-Monday 10:00-18:00
DUNJINGARAV SETTLEMENT CENTER
Dunjingarav trade center-Block D2, Khoroo#26, Bayanzurkh district,
Ulaanbaatar city
Saturday
KHARKHORIN BUSINESS CENTER
MGL Outlet center-1st floor, Moscow Street, Khoroo#20, Bayangol
Tel: 96008938
Sunday
KHUNSNII 4 BRANCH
CITY OFFICE LLC bldg, Khoroo#8, Sukhbaatar district,
Ulaanbaatar city
Tel: 70079015; Fax: 70079015
Monday- Friday 09:00-18:00; Closed on Saturday and Sunday
CHINGELTEI SETTLEMENT CENTER
Opposite side of the Khoroo#18 road, Chingeltei district,
Ulaanbaatar city
Monday-Friday 09:00-18:00; Closed on Saturday-Sunday
CHINGELTEI ND SETTLEMENT CENTER
Social insurance bldg /behind school#5/ Chingeltei district,
Ulaanbaatar city
Tel: 70001912 /127
KHAILAAST SETTLEMENT CENTER
At the Business Incubator Center for support of SMEs, Chingeltei
district, Khoroo#15, Chingeltei district, Ulaanbaatar city
Tel: 96115006;
17 SETTLEMENT CENTER
At the 17 bus stop, Khoroo#13, Sukhbaatar district, Ulaanbaatar
city
Tel: 96118815
Monday-Friday 09:00-18:00, Closed on Saturday and Sunday
DAMBADARJAA SETTLEMENT CENTER
Dambadarjaa terminal, Sukhbaatar district, Ulaanbaatar city
Tel: 96118022
Monday-Friday 09:00-18:00; Closed on Saturday and Sunday.
TAVIN MYANGAT BUSINESS CENTER

Bldg#21, No.14, Peace avenue, Khoroo#2, Chingeltei district,
Ulaanbaatar city
Tel: 96119903
Monday-Friday 08:00-22:0; Saturday-Sunday 10:00-20:00
TSAIZ 16 BRANCH
Bldg#75-1st floor, Khoroolol#16, Khoroo#16, Bayanzurkh district,
Ulaanbaatar city.
Tel: 91011065
KHOROOLOL BUSINESS CENTER

Apex trade center-1st floor, left to the Sookh Shoe market,
Khoroo#14, Khoroolol#3, Bayangol district, Ulaanbaatar city
Tel: 70079002; Fax: 70079002
Sunday.
BAYANZURKH SETTLEMENT CENTER

Mongolian Peoples Revolutionary party bldg, Peace Avenue,
Khoroo#5, Bayanzurkh district Ulaanbaatar city
Tel: 70079010 Fax: 70079010
CITY CUSTOMS BUSINESS CENTER

Ulaanbaatar citys customs department bldg, Khoroo#1, Teeverchdiin
Street, Bayangol district, Ulaanbaatar city
Tel: 96119901; Fax: 50119901
BAYANZURKH SOCAIL INSURANCE SETTLEMENT CENTER

Bayanzurkh district social insurance bldg, Ulaanbaatar city.
CAPITAL BANK
Annual report 2015
ALTAN-ULGII SETTLEMENT CENTER

BLDG#108, Dorj Street, Bayanzurkh district, Ulaanbaatar city.
Tel: 96118810
BOTANIK SETTLEMENT CENTER
Botanik terminal, Khoroo#12, Bayanzurkh district, Ulaanbaatar city.
Tel: 96119928
51
TAVAN SHAR SETTLEMENT CENTER

5 shar-bldg#66, Khoroo#18, Songino Khairkhan district, Ulaanbaatar
city
Tel: 96118820
MILITARY TOWN SETTLEMENT CENTER
Fuel Street, bldg#41, Khoroo#20, Songino khairkhan district,
Ulaanbaatar city
Tel: 96119917; Fax: 96119917
CAPITAL TOWN BRANCH

Capital town-1st floor, Bayangol district, Khoroo#18, Ulaanbaatar
city
Tel: 70079001 Fax: 70079001
GUNGERVAA SETTLEMENT CENTER

Gungervaa market, Tolgoit, Khoroo#1, Songino khairkhan district,
Ulaanbaatar city
Tel: 70171811; Fax: 70171811
THERMAL POWER PLANT#4 SETTLEMENT CENTER

UB railway Ulaanbaatar center-2nd floor, Khoroo#1, Teeverchdin
Street, Bayangol District, Ulaanbaatar city
TAKHILT SETTLEMENT CENTER

Opposite of 22nd khoroo road, Songinokhairkhan district,
Ulaanbaatar city
Tel: 91011057
KHOROOLOL#10 SETTLEMENT CENTER

Itgelt town-1st floor, Khoroolol#10, Khoroo#5, Bayangol district,
Ulaanbaatar city
Tel: 96115003 Fax: 96115003
ALTAI TOWN SETTLEMENT CENTER
Uildverchnii Street, bldg#9 /front of Altai town/, Khoroo#3, Khanuul district, Ulaanbaatar city
Tel: 96118807
BUYANT-UKHAA SETTLEMENT CENTER
Bldg#58-1st floor, Khoroo#10, Khan-uul district, Ulaanbaatar district
Tel: 96110061
AIRPORT SETTLEMENT CENTER
Chinghis Khan International airport, Khoroo#10, Khan-uul
Tel: 96118801
Monday-Sunday 24hrs
BUYANT-UKHAA SETTLEMENT CENTER
In the post office of Chinghis khan international airport
Monday-Friday 08.30-17.30, Closed on Saturday and Sunday
KHOROOLOL#21 BRANCH
Social insurance service bldg of Songino Khairkhan district, Labour
Union Street, songino Khairkhan district, Ulaanbaatar city
Tel: 70079019
Monday-Friday 08.30-17.30, Closed on Saturday and Sunday
KHILCHIN TOWN SETTLEMENT CENTER
Bayanhoshuu 6-54, Khoroo#7, Songino Khairkhan district,
Ulaanbaatar city
Tel: 96119907; Fax: 96119907
52
CAPITAL BANK
Annual report 2015
PROVINCIAL AREA BRANCHES AND UNITS

UMNUGOVI BRANCH
3rd bag, Dalanzadgad soum, Umnugovi province
Tel: 70532193 Fax: 70533971

Monday-Friday 09:00-18:00, Saturday 10:00-15:00, Closed on
Sunday
BAGANUUR BRANCH
Natsagdorj street-63, Naran khoroolol, 3-khoroo, Baganuur district,
Ulaanbaatar
Tel: 7021-2412, 7021-0408
Sunday
BAIDLAG SETTLEMENT CENTER
Baidlag 4th street, 4th khoroo Baganuur district, Ulaanbaatar
Tel: 70210445 Fax: 70210445
ORKHON BRANCH
In front of 20th building of 4th micro, Urt tsagaan, Bulag bag,
Bayan-Undur soum, Orkhon province
Tel:70394504, 70394505 Fax: 70357505

NIIGMIIN DAATGAL SETTLEMENT CASHIER
Social insurance building, Bayan Undur soum, Orkhon province
Tel:70357510
Monday-Friday 08:00-18:00, Saturday 09:00-15:00 Closed on
Sunday
BULAG SETTLEMENT CENTER
Building #2-26, Oyut bag, Bayan-Undur soum, Orkhon province
Tel: 70356604 Fax: 70356604

IKH ZALUU SETTLEMENT CENTER
PC mall shopping center, Bayan Undur soum, Orkhon province
URT TSAGAAN SETTLEMENT CENTER
Ikh zaluu bag, Bayan Undur soum, Orkhon province
CHANDMANI SETTLEMENT CENTER
#207, Erdene-Chandmani LLC building, Bayan-Undur soum, Orkhon
province
Tel:70356504
Sunday
ZAMYN-UUD BRANCH
1st floor of Gun service center, Zamyn uud soum, Dornogovi
province
Monday-Sunday 09:00-19:00
RAILWAY STATION SETTLEMENT CASHIER
Passenger service center, Zamyn-Uud soum, Dornogovi
province
Tel: 0252-45-43299
BORDER SETTLEMENT CASHIER
Single point service building, AZKHSHNTsogtsolbor, Zamyn-Uud
soum, Dornogovi province

E-TRANS SETTLEMENT CASHIER
Customs control area, E-TRANS LLC, Zamyn Uud soum, Dornogovi
province
SOCIAL INSURANCE SETTLEMENT CASHIER

Social insurance building, Zamyn-Uud soum, Dornogovi
province
Tel: 0252-45-43890, 70527996 Fax: 0252-45-43891
ARKHANGAI BRANCH
Mongolian telecommunications company building, 2nd bag,
Erdenebulgan soum , Arkhangai province
Tel: 70333470 Fax: 70333470
DARKHAN BRANCH
Bayan ider trade center building, 16th bag, Darkhan soum,
Darkhan-Uul province
Tel: 70377102 Fax: 70377102

Monday-Friday 09:00-18:00, Closed on Saturday, Sunday 10:0015:00
DARKHAN ZAKH SETTLEMENT CENTER
Tax department building, 7th bag, Darkhan soum, Darkhan Uul
province
Tel:70376983
Sunday
KHEETEI KHOROOLOL SETTLEMENT CENTER
MPP committee building, 5-khoroolol, 10-bag, Darkhan soum,
Darkhan-Uul province
Tel: 70377112
Fax: 70377112
ZUUNKHARAA SETTLEMENT CENTER
Sangiin dalai service center building, Mandal soum, Selenge
province
Tel: 70367461
KHOVD BRANCH
Khovd pharmacy building, Jargalant soum, Khovd province
Tel: 7043-2993 Fax: 7043-2993

IKH BUYAN SETTLEMENT CENTER
Ikh buyan market of Ooj Van LLC, Jargalant soum, Khovd
province
Tel: 70439939
Monday-Friday 10:00-19:00, Closed on Saturday, Sunday 10:0019:00
BULGAN SETTLEMENT CENTER
Bulgan soum center, Khovd province
KHUVSGUL BRANCH
Capital bank building, 8-bag, Murun soum, Khuvsgul province
Tel: 70388498 Fax: 70388499
MURUN SETTLEMENT CENTER
Bolor service center building, Murun soum, Khuvsgul province
Tel: 70388496
Tuesday-Sunday 09:00-18:00 Closed on Monday
BAYAN-ULGII BRANCH
4 road cross, 8-bag, Ulgii soum, Bayan Ulgii province
Tel: 70422298 Fax: 70422298
CAPITAL BANK
Annual report 2015
ULGII SETTLEMENT CENTER

Nurjarkhin trade center, Central square of Ulgii, Bayan-Ulgii
province
Sunday
UVS BRANCH
Uvs pharmacy building, 3-bag, Ulaangom soum, Uvs province
Tel: 70454555 Fax: 70454555
BAYANKHONGOR BRANCH
1st floor of Bayankhongor em impex, 3-bag, Bayankhongor soum,
Bayankhongor province
Tel: 70444595 Fax: 70444595
KHONGOR SETTLEMENT CENTER
BayanMongol service center building, Bayankhongor soum,
Bayankhongor province
Tuesday-Sunday 09:00-18:00 Closed: Monday
UVURKHANGAI BRANCH
Central pharmacy building, 5-bag, Arvaikheer soum, Uvurkhangai
province
Tel: 70324090 Fax: 70324090

DORNOD BRANCH
To Van hotel 1st floor, 9-bag, Kherlen soum, Dornod
province
Tel: 70584934 Fax: 70584934
Sunday
KHERLEN SETTLEMENT CENTER
Building #24, Kherlen soum, Dornod province
Tel: 70584933
SELENGE BRANCH
Altanbulag trade center building, Sukhbaatar soum, Selenge province
Tel: 70363753

Sunday
DORNOGOVI BRANCH
Utilities building, Sainshand soum, Dornogovi province
Tel: 70523778
KHENTII BRANCH
1st floor of Bayan-Erdes, Temuujin street, Chingis soum, Khentii
province
Tel: 70562811
SUKHBAATAR BRANCH
Unu-Enkhjin service center building, Baruun urt soum, Sukhbaatar
district
Tel: 70510500
53
DUNDGOVI BRANCH
Mongol em impex LLC building, Saintsagaan soum, Dundgovi
province
TUV PROVINCE BRANCH
Capital bank building, Nomt bag trade street, Zuunmod soum, Tuv
province
Tel: 7027-3455
BULGAN BRANCH
MEIC building, 5-bag, Bulgan soum, Bulgan province
Tel: 70344448, 70344449
ZAVKHAN BRANCH
MEIC building, Jinst bag, Uliastai soum, Zavkhan
province
Tel: 70463055
GOVISUMBER BRANCH
Capital bank building, 1-bag, Sumber soum, Govisumber province
Tel: 70543678
ND SETTLEMENT CASHIER
Social insurance building, 2-bag, Sumber soum, Govisumber
province
Tel: 70543677
GOVI-ALTAI BRANCH
Capital bank building, Batsuuri street, Esonbulag soum, Govi-Altai
province
Tel: 70483855
ULAANBAATAR CITY
Position of ATM
KHOROOLOL#10, ATM AT 5A BLDG
Bayangol district Khoroo#6
KHOROOLOL#10, SHINE DELKHII WELLMART ATM
Bayangol district, khoroo#5, Khoroolol#10, Itgeltkhotkhon, Capital bank
KHOROOLOL#13 MINII ZAH ATM
Bayanzurkh district, horoolol#13, behind the bus stop, Miniizakh
KHOROOLOL#16 WELLMART ATM
Bayanzurkh district, khoroolol#16, in front of bus stop wellmart
KHOROOLOL#21 MINII ZAKH ATM
SonginoKhairkhan district, Khoroo#19, opposite side of Trolleybus depo
22 TOVCHOO WELLMART ATM
Songino-khairkhan district 22tovchoo wellmart
32 TOIROGNOMIN SUPERMARKET ATM
Chingeltei district, 32 Toirog, Nomin supermarket
KHOROOLOL#3, 1000 NERIINBARAANI ATM
Bayangol district, Khoroolol#3, 1000 neriinbaraa
5 SHAR WELLMART ATM
Songino-khairkhan district, khoroo#18, bdlg#66
10
ALTAN SOYOMBO ATM
Sukhbaatar district, khoroo#14, 7 buudaletses, outside Altansoyombo

center
11
ALTAN-ULGII 21ST CENTURY KHOTKHON SETTLEMENT

CENTER ATM
Bayanzurkh district, khoroo#22, 21st century khotkhonbdlg
12
ALTJIN BUMBUGUR TRADE CENTER ATM
Bayanzurkh district, khoroo#22, Altjinbumbugurtrade center
13
ARD BRANCH ATM
Chingeltei district, Khoroo#1, opposite side of Mongolbank
14
ARIUN TENGIS TRADE CENTER ATM
Sukhbaatar district, Dari ekh Street, Ariuntengis trade center, 1st floor
15
BAGSHIIN DEED TUGULDUR CENTER
Sukhbaatar district, Khoroo#7, Tuguldur center, 1st floor
16
BARILGACHDIIN SQUARE, MINI SUPERMARKET
Chingeltei district, Khoroo#1, Mini store in front of Tuul restaurant
17
BAYANGOL DEPARTMENT STORE ATM
Bayangol district, Khoroo#8, Bayangol department store, 1st floor
18
BAYANGOL DISTRICT, INSIDE GOVERNORS OFFICE ATM
Bayangol district, Khoroo#2, inside governors office, 1st floor
19
BAYANZURKH DISTRICT, KHOROO#8, AUTO VOKZAl
Bayanzurkh district, Auto vokzal
20
BAYANZURKH DISTRICT, MPRP BLDG-910 BRANCH ATM
Bayanzurkh district, Khoroo#5, Mongolina Peoples revolutionary party

bldg
21
BISHRELT HOTEL ATM
Chingeltei district, Khoroo#4, Bishrelt hotel
22
BISHRELT DEPARTMENT STORE ATM
Chingeltei district, Khoroo#5, Bishrelt department store
23
BOTANIK WELLMART ATM
Bayanzurkh district, Khoroo#10, Botanik terminal
24
BUYANT-UKHAA MONOPOLE CENTER ATM
Khan-uul district, Khoroo#9, 23rd Street, Monopole center, floor 1
25
GRAND PLAZA TRADE CENTER ATM
Bayangol district, Khoroo#2, Grand plaza, 1st floor
26
GUNGERVAA ATM
Songinokhairkhan district, Khoroo#2, Gungervaa trade center
27
DALAI EEJMINIIZAKH ATM
Sukhbaatar district, Khoroo#3
28
DAMBA NARAN CENTER ATM
Sukhbaatar district, Khoroo#16, Damba terminal, Naran center, 1st floor
29
DRAGON CENTER ATM
Songinokhairkhan district, Dragon center
30
DUNJINGARAV TRADE CENTER ATM
Bayanzurkh district, Khoroo#26
31
INSIDE THERMAL POWER PLANT#4
Sukhabaatar district, Khoroo#5, Thermal power plant#4 bldg
32
CAPITAL TOWN ATM
Bayangol district, Khotoo#18, bldg#32B, 1st floor
33
INSIDE ITPARK ATM
Sukhabaatar district, Khoroo#8
34
NARANTUUL LOAN CENTER ATM
Bayanzurkh district, Khoroo#14
35
SUNDAY TRADE CENTER ATM
Bayanzurkh district, Khoroo#14, 1st floor
36
SANSAR TUNNEL 1 ATM
Bayanzurkh district, Khoroo#7, behind the tunnel passage
37
SANSAR TUNNEL 2 ATM
Bayanzurkh district, Khoroo#7, behind the tunnel passage
38
SKYTEL CENTER ATM
Sukhbaatar district, Khoroo#1, Skytel center, 1st floor
39
SOYOMBO MOVIE THEATER ATM
Songinokhairkhan district, Khoroo#16, Soyombo movie theater
40
SELENGE MARKET ATM
Songino-khairkhan district, Khoroo#20, inside Selenge market
41
TAVINMYANGAT BRANCH ATM
Chingeltei district, Khoroo#3, next to Matrix salon
42
TAKHILT SETTLEMENT CENTER ATM
Songino-khairkhan district, Khoroo#22, Takhilt bus stop
43
CENTRAL BANK ATM
Chingeltei district, Khoroo#5, Capital bank center
44
TEDY CENTER ATM
Chingeltei district, Khoroo#5, Tedy center, 3rd floor
45
UB ELECTRIC TRANSMISSION NETWORK
Khan-uul district, Khoroo#2, UB Electric transmission network bldg
46
UB RAILWAY STATION VOKZAL ATM
Bayangol district, Khoroo#2, UB railway store
47
STATE DEPARTMENT STORE ATM
Chingeltei district, Khoroo#3, State department store, 5th floor
48
MONGOLIAN STATE UNIVERSITY OF AGRICULTURE ATM
Khan-uul district, Zaisan 17024, in Mongolian state university of agriculture
49
KHAILAAST SETTLEMENT CENTER ATM
Chingeltei district, Khoroo#13, old terminal
50
KHILCHIN KHOTKHON ATM
Songinokhairkhan district, opposite side of KhilchinKhotkhon
51
KHOROOLOL APEX 1 ATM
Bayangol district, Khoroo#15, outside APEX trade center
52
KHOROOLOL APEX 2 ATM
Bayangol district, Khoroo#15, outside APEX trade center
53
KHOROOLOL APEX TRADE CENTER ATM
Bayangol district, Khoroo#15, outside APEX trade center , 1st floor
54
KHAN-UUL DISTRICT HYPERMARKET ATM
Khan-uul district, KHoroo#2, Nomin storage bldg
55
KHAN-UUL DISTRICT NOMIN UNITED ATM
Khan-uul district, Khoroo#2, Nomin United, 1st floor
56
OLD BUMBUGUR TRADE CENTER ATM
Chingeltei district, Khoroo#2
57
KHUCHIT KHONKHOR MARKET ATM
58
CHINGHIS KHAAN INTERNATIONAL AIRPORT ATM
Chinegltei district, Khoroo#11
59
CHINGELTEI SETTLEMENT CENTER ATM
ChinghisKhaan International Airport
60
YARMAG HUUCHIN ETSES ULZIIT ATM
Khan-uul district, Khoroo#8, Yarmag old terminal, Ulziit store
CAPITAL BANK
Annual report 2015
55
56
CAPITAL BANK
Annual report 2015
KHUVSGUL BRANCH

Tevkhen trade center, Khuvsgul branch
Murun auto parts, Murun soum, Khuvsgul branch
UVS BRANCH
Ulaangom bituuzakh ATM
ORKHON BRA
Oyu center ATM
ErdenetNomin A
BAYAN-ULGII BRANCH
Telecommunications building
ATM, Bayan-Ulgii
BULGAN BRANCH
Uvskhuns supermarke
Bulgan soum
ZAVKHAN BRANCH
Uliastaisoum ATM

ARKHANGAI BRANCH
Tansag supermarket ATM,
Erdenebulgan soum,
Arkhangai
KHOVD BRANCH

Khishig settlement center ATM
Khovd Jargalant ATM (branch)
BAYANKHONGOR BRANCH
MKHS center building ATM,
Bayankhongor
GOVI-ALTAI BRANCH

Altay 5 bogd supermarket ATM, Altay soum
PROVINCES
ATM LOCATION
ARKHANGAI BRANCH
Tansag supermarket ATM, Erdenebulgan soum, Arkhangai
BULGAN BRANCH
Uvskhuns supermarket ATM, Bulgan soum
3
4
BAGANUUR BRANCH
Post office building ATM, Baganuur

Kherlen supermarket ATM, Baganuur
BAYANKHONGOR BRANCH
MKHS center building ATM, Bayankhongor
BAYAN-ULGII BRANCH
Telecommunications building ATM, Bayan-Ulgii
GOVI-ALTAI BRANCH
Altay 5 bogd supermarket ATM, Altay soum
GOVI-SUMBER BRANCH
Railroad building ATM
9
10
11
Darkhan transport building ATM

DARKHAN BRANCH
12
S Market
Darkhan international trade center ATM
Suvdansondor supermarket ATM
13
DORNOD BRANCH
18 supermarket ATM
14
DORNOGOVI BRANCH
Badrakh hotel ATM
15
DUNDGOVI BRANCH
Yalguun supermarket ATM
16
ZAVKHAN BRANCH
Uliastai soum ATM

UVURKHANGAI BRANCH
Uvurkhangai Oyu center
CAPITAL BANK
Annual report 2015
ANCH
M
ATM
SELENGE BRANCH

Altanbulag, Sukbaatarsoum
Sangiindalai ATM, Mandalsoum
DARKHAN BRANCH

Darkhan transport building ATM

S Market
Darkhan international trade center ATM
Suvdansondor supermarket ATM
DORNOD BRANCH
18 SUPERMARKET ATM
et ATM,
KHENTII BRANCH
Khentii branch ATM
Khentii post office ATM
ULAANBAATAR
TUV PROVINCE BRANCH

Emkhangamj ATM, Zuunmod soum, Tuv
province
DUNDGOVI BRANCH
Yalguun supermarket ATM
BAGANUUR BRANCH
Post office building ATM, Baganuur
Kherlen supermarket ATM, Baganuur
SUKHBAATAR BRANCH
Unu Enkhjin center ATM, Baruun
Urt soum
GOVI-SUMBER BRANCH
Railroad building ATM
DORNOGOVI BRANCH
Badrakh hotel ATM
ZAMYNUUD BRANCH

AZHSHNTsogtsolbor customs center ATM

UMNUGOVI BRANCH
Tsogjavkhlan supermarket ATM
17
18
ORKHON BRANCH
Oyu center ATM

Erdenet Nomin ATM
19
UVURKHANGAI BRANCH
Uvurkhangai Oyu center ATM
20
UMNUGOVI BRANCH
Tsogjavkhlan supermarket ATM
21
SUKHBAATAR BRANCH
UnuEnkhjin center ATM, Baruun Urt soum
22
23
SELENGE BRANCH
Altanbulag, Sukbaatar soum

Sangiindalai ATM, Mandal soum
24
TUV PROVINCE BRANCH
Emkhangamj ATM, Zuunmod soum, Tuv province
25
UVS BRANCH
Ulaangom bituuzakh ATM
26
27
28
29
30
31
32
33
KHOVD BRANCH
KHUVSGUL BRANCH
KHENTII BRANCH
ZAMYNUUD BRANCH
Khishig settlement center ATM

Khovd Jargalant ATM (branch)
Tevkhen trade center, Khuvsgul branch
Murun auto parts, Murun soum, Khuvsgul branch
Khentii branch ATM
Khentii post office ATM
AZHSHNTsogtsolbor customs center ATM
Jimbii restaurant ATM
57
58
CAPITAL BANK
Annual report 2015
AUDITED FINANCIAL
STATEMENT FOR YEAR 2015
CAPITAL BANK
Annual report 2015
59
60
CAPITAL BANK
Annual report 2015
CAPITAL BANK
Annual report 2015
CAPITAL BANK LLC
Statement of Financial Position
As of 31 December 2015
2015
MNT000
2014
MNT000
3
4
5
6
6
7
8
9
10
11
12
29,559,127
3,956,430
26,784,699
22,795,789
482,278
544,793,498
64,756,231
7,576,901
30,655,760
14,242,645
745,603,358
78,009,528
67,092,377
16,605,013
9,717,063
99,090,725
499,316
490,839,049
49,374,711
2,035,214
2,507,883
1,670,958
817,441,837
13
14
15
16
5
17
31,920,456
8,786,458
346,572,313
262,470,010
228
10,831,963
87,063
1,635,734
662,304,225
130,844,588
39,293,695
324,957,560
249,974,576
1,401,020
500,504
888,655
747,860,598
53,000,000
15,882,170
14,416,963
83,299,133
745,603,358
33,000,000
23,083,353
13,497,886
69,581,239
817,441,837
Notes
Assets
Cash and balances with Bank of Mongolia
Due from banks
Derivative financial instruments
Financial investments available-for-sale
Financial investments held-to-maturity
Investments in associate
Loans and advances to customers
Property and equipment
Intangible assets
Other assets
Assets held for sale
Total assets
Liabilities and shareholders equity
Liabilities
Due to banks
Repurchase agreements
Due to customers
Borrowed funds
Derivative financial instruments
Other liabilities
Corporate income tax payable
Deferred tax liabilities
Total liabilities
26
Equity
Ordinary shares
Other reserves
Retained earnings
Total equity
Total liabilities and equity
18
The accompanying notes form an integral part of these financial statements.
61
62
CAPITAL BANK
Annual report 2015
CAPITAL BANK LLC

Statement of Profit or Loss and Other Comprehensive Income
For the year ended 31 December 2015
Notes
2015
MNT000
2014
MNT000
Interest and similar income

Interest and similar expense
Net interest income
20
21
76,580,667
(60,416,735)
16,163,932
71,127,906
(47,818,405)
23,309,501
Fees and commission income

Fees and commission expense
Net fees and commission income
22
22
2,830,654
(170,486)
2,660,168
2,111,568
(235,777)
1,875,791
Net trading income

Other income
Total operating income
23
7,792,210
158,741
26,775,051
9,140,125
34,325,417
Credit loss expense

Net operating income
24
(4,455,111)
22,319,940
(4,441,190)
29,884,227
Operating expenses
Non-operating expense
Share of loss in associate
Profit before tax
25
(21,015,193)
(286,618)
(17,038)
1,001,091
(18,534,627)
(684)
11,348,916
Income tax expense
26
(82,014)
(2,411,566)
919,077
8,937,350
13,758,768
Profit for the year attributable to

equity holders of the Bank
Items that may be reclassified subsequently to income
statement:
Net change in fair value of available-for-sale financial
investments
Deferred tax effect on change in fair value of available-forsale financial investments
Other comprehensive income (expense) for the year
Total comprehensive income for the year, attributable
to equity holders of the Bank
26
(955,619)
12,803,149
(420,258)
(420,258)
13,722,226
8,517,092
The accompanying notes form an integral part of these financial statements.
Sambuu street - 43, Chingeltei district,

Ulaanbaatar city 211238, Mongolia
Website: http://www.capitalbank.mn
E-mail: info@capitalbank.mn
TEL: +976-7000-1912, +976-1800-1912,
FAX: +976-310833

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Annual Report 2015

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ANNUAL REPORT

THE FIRST COMMERCIAL BANK OF MONGOLIA

Message from Director of the BOD

Message from CEO 07-09

Financial indicators 28-31

Capital Market Corporation SC LLC

Our mission for 2016 47-48

respect, business ethics and responsibility

CAPITAL BANKS IDEOLOGY AND VALUES

We will ensure the appropriate implementation of Law against money

To be nature-friendly Green E-Bank that supports small

and medium sized enterprises (SMEs)

Business activities of the bank shall adhere to the acknowledged principles

Shareholder, Members of the Board of Directors and Executive management

We will respect rights and freedom of employees by implementing a

MESSAGE FROM DIRECTOR OF THE

MESSAGE FROM DIRECTOR OF THE BOARD OF DIRECTORS

Corporate governance practice has become the attention

Last year, although it was under unfavorable condition, the

MESSAGE FROM CEO

MESSAGE FROM CEO

their functions to implement strategic goal, to ensure bank

- Introduced billing services

- Introduced independent card processing system successfully

For the reporting year, reputable and prestigious domestic

I want to express my sincere gratitude to all our customers,

CAPITAL BANK IN YEAR 2015

BEST COMMERCIAL BANK OF

Capital bank was selected as the

TOP 100 ENTITIES OF

Capital bank was selected as

Successfully introduced card independent system and

MOODYS CREDIT RATING

Capital bank received <B3> credit rating with <STABLE>

PRINCIPAL MEMBER OF VISA

In addition to introducing independent

HERDER SAVINGS PRODUCT

With purposes of expanding foreign relations, the bank

The bank started to cooperate with Yeabit eye hospital

Capital bank, in cooperation with Union

Organized Herder savings product

TOP 2 AT FINANCIAL AND

Capital bank was selected as

We have reflected in our core values to Implement

Within the scope of these objectives, the bank has efficiently

- Vision of the bank is to promote SMEs and to be national

- Organic Mongolia program, one of the major works

- Capital bank sponsors Capitals hockey team from

Capital bank has been continuously cooperating with MNCCI,

Within this program, the bank organized charity campaign

In the scope of contributing to the development of Mongolia

Capital bank has 20 some credit products and the following

- Loans amounting to MNT 200 million were granted to total

SPONSORSHIPS, DONATIONS, ASSISTANCE

- Capital bank joined MNT1000 campaign organized by

Sponsored participation in International hockey contest

Sponsored the teams participation representing Mongolia

- -In the scope of event Special Olympics World Games

- Made in Ulaanbaatar trade fair is organized by SME

- The bank, for the well-being of Mongolians, concluded

MONGOLIAN SUSTAINABLE FINANCE PROGRAM

HIGHLIGHTS OF 2015 IN THE SCOPE OF SUSTAINABLE FINANCING.

In order to establish basis for operations to be in line with determined

Created condition to get service