Goldman Sachs acquires 4.8% stake in Mongolian bank

Goldman Sachs purchased a 4.8 per cent stake in Mongolia’s Trade and Development Bank for less than $50 milion.

It is Goldman Sachs’ first deal in the Mongolian financial sector.

Mongolian banks are also increasingly looking for overseas investments to meet their capital needs as the country has been experiencing a liquidity crunch since last fall as the government tries to rein in lending and cool inflation, according to bankers.

“The banks are out of money now,” said Peter Morrow, former chief executive of Khan Bank, one of Mongolia’s largest. “Liquidity was very high a year ago but it’s been burned up because there is such high growth and high lending.”

Goldman’s stake in Trade and Development Bank is limited to 4.8 per cent because any investment of more than 4.99 per cent in a financial institution would require a special exemption from the US Federal Reserve under the new Dodd-Frank rules.

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