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Investor Presentation March 2017

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• f the information you may consider material. It is not the intention to provide, and you may not rely on this presentation as providing, a complete or comprehensive description of the Bank’s

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> Mongolia Macroeconomic Developments Banking Industry TDB Overview Investment Summary

Laying the Foundations for Long-Term Growth

GDP growth is highly correlated to FDI

3

Mongolia is expected to receive IMF bailout package

Source: National Statistical Office of Mongolia, IMF, Bank of Mongolia

IMF’s three–year Extended Fund Facility (EFF)

• IMF and Mongolian Government jointly announced that the

Government of Mongolia reached staff-level agreement with the International Monetary Fund for a three-year program that includes a $440 million loan package as part of a $5.5 billion plan.

• Floating interest rate will be no more than 2% p.a.

Repayment period is 10 years. IMF will monitor progress on a quarterly basis before the next loan tranche is given.

• International partners’ programs such as Asian Development

Bank, World Bank, and bilateral partners including Japan and Korea together expected to provide up to $3 billion in budget and project support. People’s Bank of China is expected to extend its ¥15 billion swap line with the Bank of Mongolia for at least three years.

• Package is expected to be approved by Executive Board in

April.

• 5%

0% 5% 10% 15% 20% 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 USD Millions FDI (LHS) GDP growth (RHS)

Forecast under EFF 2017 2018 2019

GDP growth (%)

• 0.1

1.8 8.1 Inflation (%) 6.1 6.1 6.9 Trade balance (billion USD) 1.26 0.96 0.7 Export (billion USD) 4.89 4.94 5.44 Import (billion USD) 3.62 3.97 4.73 Foreign exchange reserve (billion USD) 1.67 2.77 3.54 External debt as of GDP (%) 86.9 85.7 79.4

IMF: Staff-Level Agreement on EFF (1)

4

• Tobacco excise tax

increase of 10% in 2018, increased 5% in 2019 and 2020.

• 10% tax on interest income

for savings is effective April 1, 2017

• Tobacco import tax

increase of 30%

• Improvement on tax

collection management in

• rder to increase budget

revenues

 Petroleum excise tax

increase in July and October 2017

 Personal income tax

increase of 10%, 15% and 20% based on income level

 Social insurance tax

increase of 2%, 1%, 2% for employer and employee in 2017, 2018 and 2019 respectively.

 Automobile excise tax

increase to 3%-15% based

• n manufactured year.

Automobiles with engine

• ver 4,501cm3 is subject to

40%-250% increase Approach on budget revenue increase

 Tender offer need when

purchasing medicine and medical equipment

 Social welfare programs audit

to remove overlapping programs

 Concession agreement without

estimation of burden on budget will be audited and reimbursement will be made in following year

 When increasing budget

expenditure, other expenditures must be reduced to offset

 No salary increase for

government officials until 2018

 Child Money Program

targeted to 40% of total children instead of 60% Reduced portion will be used to spend on the food stamp program for the most vulnerable

 Suspend the program of

providing residence or residential allowance to veterans

 Pension age increase by

1.5 years in every 2 year. By 2026, pension age for male will be 65 years and for female it will be 65 years by 2036

             IMF financing is necessary to restore economic stability and debt sustainability in order to create strong, sustainable and inclusive growth in Mongolia.

Source: IMF

 

Approach on budget expenditure reduction Approach on budget revenue increase Approach on budget expenditure reduction



IMF: Staff-Level Agreement on EFF (2)

5

• Flexible exchange rate

policy with intervention limited to smoothing excessive volatility and preventing disorderly market conditions

• Adoption of new BOM law

to clarify its mandate, strengthen governance, and improve independence

 Tight monetary policy given

the objective of price stability

 Subsidized mortgage loan

program as a revolving fund

 Bank of Mongolia (BOM)’s

solely pursuit to monetary interventions from now, forbidding no more engagement in quasi-fiscal activity Monetary policy

• Government commitment to

the deposit insurance

• Commitment to strengthen the

regime for Anti-Money Laundering and Combating the Financing of Terrorism.

• Independent evaluation
• n financial sector to

assess institutions’ financial soundness and resilience

• BOM’s engagement on

banks to ensure appropriate restructuring and recapitalization

• Strengthening the

regulatory and supervisory framework of BOM

        Strengthening the banking system is a crucial part of the program, to ensure that the banks can support sustainable and inclusive economic growth

Source: IMF

Banking sector evaluation Monetary policy



Banking sector evaluation



Trade Balance Continues to Show Surplus

Positive trade balance trend has been maintained since 2014 Production increases have helped offset price decreases

6

Strong copper production, coupled with import compression

500 1,000 1,500 2,000 2,500 3,000 Copper Coal Crude Oil Iron Ore Gold USD Millions

Export of main commodities

(2010 through 2016)

Source: National Statistical Office

• 4,000
• 2,000

2,000 4,000 6,000 8,000 2009 2010 2011 2012 2013 2014 2015 2016 USD Millions

External trade

Export Import Trade Balance

Main commodity price

Improvement on the price of main export commodities and expected positive outlook in near future supporting export and trade balance

7

Update on price of main export commodities

Source: National Statistical Office

4,000 4,500 5,000 5,500 6,000 6,500 1/4/2016 4/4/2016 7/4/2016 10/4/2016 1/4/2017

Copper Price

1,100 1,140 1,180 1,220 1,260 1,300 1,340 1,380 3/9/2016 6/9/2016 9/9/2016 12/9/2016 3/9/2017

Gold Price

40 50 60 70 80 90 100 110 5/17/2016 7/17/2016 9/17/2016 11/17/2016 1/17/2017

Iron Ore Price

20 30 40 50 60 1/4/2016 4/4/2016 7/4/2016 10/4/2016 1/4/2017

Crude Oil Price

20 30 40 50 60 70 1/31/2016 4/30/2016 7/31/2016 10/31/2016

China Coking Coal Import Price Mongolia

External Accounts Have Stabilized

Trade surplus helped narrow current account deficit … which helps FX reserve levels stay within the band

8

Positive trade balance helped to narrow the current account deficit

• 4,000
• 3,500
• 3,000
• 2,500
• 2,000
• 1,500
• 1,000
• 500

2008 2009 2010 2011 2012 2013 2014 2015 2016

USD Millions

Current Account Balance

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 2008 2009 2010 2011 2012 2013 2014 2015 2016 USD Millions

Gross Foreign Exchange Reserve (2010 through 2016)

Source: Bank of Mongolia

Mongolia Macroeconomic Developments > Banking Industry TDB Overview Investment Summary

• Commercial banks are the most important and integral

part of Mongolia’s overall financial system, accounting for approximately 85% of the system by assets

• 14 commercial banks and one policy bank
• Commercial banks are regulated by the Bank of

Mongolia

• Key players:
• TDB was the number one corporate bank as

measured by corporate loans market share with increasing SME/retail banking share as of Sep 30, 2016

• Khan Bank and State Bank have large branch

networks and focus on retail banking

• Golomt Bank focuses on corporate banking
• XacBank focuses on microfinance and small

business lending

• TDB remains the only commercial bank to have access

to the international bond markets

TDB 27.9% Khan 25.3% Golomt 17.6% Xac 9.7% State 8.1% Others 11.4%

Banking Sector Overview

Banks play the largest role in Mongolia’s financial system Five largest banks account for more than 85% of the sector by total assets (3Q2016)

10

TDB and five others are classified as systemically important banks

Total Assets MNT 24.7 Trillion

Source: Bank of Mongolia, Trade & Development Bank of Mongolia, website of each commercial bank financial reports as of Sep 30, 2016

Banks are tested by a protracted economic slowdown

Banks play a prominent role in the economy which is structurally shifting to Tugrik loans (Q4 2016) Despite the slowdown, the banking sector remains profitable

11

Rising NPLs amidst a challenging macro sector

42.5% 41.6% 56.0% 57.0% 50.5% 51.7% 68.5% 67.9% 72.7% 76.9% 76.1% 80.1% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 2011 2012 2013 2014 2015 2016

Whilst proactively managing their loan books

184.3 198.4 229.7 325.9 253.7 88.0 50 100 150 200 250 300 350 2011 2012 2013 2014 2015 3Q2016 MNT Billions Aggregate Banking Sector Profit Source: National Statistical Office of Mongolia, www.1212.mn, Bank of Mongolia and website of each commercial bank financial reports as of Sep 30, 2016

Loans in Tugrik Loan-to-GDP ratio

0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 0.0 3.0 6.0 9.0 12.0 15.0 2008 2009 2010 2011 2012 2013 2014 2015 2016Q3 MNT Trillions Loans Outstanding (LHS) NPL Ratio (RHS)

31.6 16.2

• 4.4

2.8

• 10
• 5

5 10 15 20 25 30 35 TDB Khan Golomt Xac MNT Millions 26.1% Khan Bank 24.2% Golomt Bank 15.6% Xac Bank 9.7% State Bank 9.2% Others 14.7% 21.0% Khan Bank 29.4% Golomt Bank 20.3% Xac Bank 7.4% State Bank 10.3% Others 12.5% 29.1% Khan Bank 23.6% Golomt Bank 12.6% Xac Bank 7.5% State Bank 6.4% Others 20.2%

Key Players and Performance

TDB is a leader by key measures

Source: Bank of Mongolia, Trade & Development Bank of Mongolia, website of each commercial bank financial reports as of Sep 30, 2016 Note: (1) Leverage = total assets / total equity

Shareholders’ equity market share

(3Q2016)

Deposits market share

(3Q2016)

Loans outstanding market share

(3Q2016)

TDB remains a leader in net profit per employee (3Q2016) Lowest leverage(1) (3Q2016)

MNT2.8 trn MNT12.6 trn MNT12.4 trn

12 8.4 9.5 12.4 11.5 0% 200% 400% 600% 800% 1000% 1200% 1400% TDB Khan Golomt Xac

Mongolia Macroeconomic Developments Banking Industry > TDB Overview Investment Summary

• Largest and longest-serving commercial bank in

Mongolia by total assets as of Sep 2016

• Most experienced and largest bank in corporate

banking by corporate lending market share

• Primary lender to many leading domestic and foreign-
• wn corporations in Mongolia across every major

sector

• Well-established network of 51 branches and

settlement centers, 206 ATMs and 2,242 POS terminals as of 3Q2016

• Direct correspondent relationships with more than 150

foreign banks and financial institutions

• Leading virtual banking services, e.g. Internet Banking

service, Mobile Banking Service, E-Billing

• The only commercial bank that has successfully issued

bonds internationally, to date five USD and one CNY international bond issuances

• Senior Unsecured EMTN ratings: Moody’s Caa1, S&P B-

as of Mar 2017.

Leading Bank in Mongolia

14

A premier financial institution in the country, celebrating 27 years

Source: Bank of Mongolia, Trade & Development Bank of Mongolia TDB, 69.7% Other, 30.3%

Trade Finance Transactions

TDB 48.0% Other 52.0%

Corporate Lending

27.7% 30.7% 27.9% 20% 30% 40%

Gold market Money market FX market

Treasury Products TDB selected market shares (3Q2016)

Corporate banking 48.2% SME banking 2.7% Retail banking 15.2% Treasury activities 33.9% Others 0.9%

Strong Fundamentals

Diversified loan portfolio (3Q2016) Segment revenue (3Q2016) Although rising, NPLs remain below sector average High collateral values provide comfort over provisioning levels

15

Diversified and reliable throughout business cycles

Source: Bank of Mongolia, Trade & Development Bank of Mongolia Note*: Consumer loan includes card loan and saving collateralized loan. Mining 14.4% Construction 15.1% Trade 15.8% Mortgage 9.7% Petrol Import & Trade 3.1% Manufacturing 9.1% Consumer* 3.8% Other 29.4% 2.5% 1.4% 1.1% 4.0% 6.3% 7.4% 5.8% 4.2% 5.3% 5.0% 7.5% 9.0% 0% 2% 4% 6% 8% 10% 2011 2012 2013 2014 2015 3Q2016 TDB Banking Sector

Total MNT 3.3 trn Total MNT 445.6 billion

63.6% 61.1% 66.0% 51.7% 56.4% 56.2% 58.5% 144.0% 132.7% 168.4% 107.2% 196.2% 228.5% 0% 50% 100% 150% 200% 250% 0.0 100.0 200.0 300.0 400.0 500.0 2011 2012 2013 2014 2015 2Q2016 3Q2016 MNT in Billions NPL Provision Collateral Coverage ratio (RHS) Total collateral value (RHS)

Strong Fundamentals (Cont’d)

16

Profitable and reliable

Source: Trade & Development Bank of Mongolia 120.7 148.2 174.3 142.6 90.2 58.2 14.2 11.0 50 100 150 200 250 2013 2014 2015 3Q2016 MNT Billions Net Interest Income Non-Interest Income

Total loans: Corporate growth amidst economic backdrop Net interest margin is steady over the years Remains a leader in net profit and ROAE

139.3 93.5 61.5 54.5 49.5% 22.4% 9.5% 10.5% 0% 10% 20% 30% 40% 50% 60% 0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 2013 2014 2015 3Q2016 MNT Billions Net Profit (LHS) ROAE (RHS) 4.4% 3.9% 4.1% 4.2% 3.0% 4.0% 5.0% 2013 2014 2015 3Q2016

Operating income remains strong, underpinned by consistent net interest income growth

1,910 2,128 2,168 2,676 517 569 456 514 122 139 119 114 500 1,000 1,500 2,000 2,500 3,000 3,500 2013 2014 2015 3Q2016 MNT Billions Corporate Retail SME

Low Cost and Diversified Funding Base

17

Strong and prudent balance sheet management

Source: Bank of Mongolia, Trade & Development Bank of Mongolia internal filings

High contribution of low cost deposits

(3Q2016)

Deposits from customers 42.0% Deposits and placements by banks and

• ther financial

institutions 2.6% Borrowings 23.8% Debt securities issued 22.8% Subordinated debt securities issued 0.4% Bills sold under repurchase agreements 4.0% Others 2.9%

The only commercial bank to complement local funding base with international debt issuance (3Q2016)

Current 39.7% Savings 10.8% Time Deposits 44.4% Others 5.1%

Total MNT 2.5 trn Total MNT 6.1 trn

Strong capital base above regulatory thresholds

15.1% 19.2% 16.7% 15.5% 11.6% 13.0% 12.3% 10.5% 14.0% 14.0% 14.0% 14.0% 9.0% 9.0% 9.0% 9.0% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 2013 2014 2015 3Q2016 CAR Tier-1 Minimum CAR Minimum Tier-1 PSP and mortgage loan funding, 13.9% Trade finance loans, 56.7% Syndicated loans, 3.7% SME Fund loans, 1.5% DBM Financed loans, 20.6% Two step loan funded by multinational Fis, 2.5% Other, 1.1%

Established Track Record of Debt Transactions

18

Market recognition of TDB’s commitment to the performance of its bonds

USD 75,000,000

8.625% Senior Notes, due in 2010 USD 150,000,000 EMTN Programme January 2007

USD 150,000,000

8.500% Senior Notes, due in 2013 USD 300,000,000 EMTN Programme October 2010

CNH 700,000,000

10.000% Senior Notes, due in 2017 USD 700,000,000 EMTN Programme January 2014

USD 82,000,000

Syndicated A/B Term Loan Facility September 2013

USD 300,000,000

8.500% Senior Notes, due in 2015 USD 700,000,000 EMTN Programme September 2012 Source: Trade & Development Bank of Mongolia, Bloomberg

USD 500,000,000

9.375% Senior Notes, due in 2020 Guaranteed by the Government of Mongolia USD 500,000,000 GMTN Programme May 2015

USD 25,000,000

12.500% Subordinated Notes, due in 2015 USD 300,000,000 EMTN Programme October 2010

 TDB is the only Mongolian commercial bank that has successfully issued bonds internationally.  US$1.25 billion have been raised through five US$ and one Dim Sum bond as well as a syndicate loan from the international markets.  This consistent approach to maintaining a diversified funding portfolio is beneficial and allows TDB to weather changing market

conditions better than its peers.

Outstanding amount: USD 17,000,000

49.7% 52.4% 49.5% 48.0% 40.0% 45.0% 50.0% 55.0% 60.0% 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 2013 2014 2015 3Q2016 Gross Loans Total Assets Loan/Asset Ratio

Tight Control on Asset Composition

19

Focus on quality loans, prudent asset management and liquidity

Source: Bank of Mongolia, Trade & Development Bank of Mongolia

Liquid assets significantly above regulatory thresholds

42.3% 41.3% 30.0% 31.5% 14.4% 11.99% 0% 10% 20% 30% 40% 50% 60% 2013 2014 2015 3Q2016 Liquidity Ratio Locked liquidity due to TDB 20’s

Minimum Liquidity Ratio at 25.0%

(MNT bn)

Loan-to-deposit ratio

119% 112% 124% 130% 100% 120% 140% 2013 2014 2015 3Q2016

Balanced asset composition (3Q2016) Loans /assets ratio managed below 60% Currency match on loans and deposits (3Q2016)

Cash and due from banks, 16.3% Investment securities, 21.8% Investment in associates and joint ventures, 0.7% Loans and advances, net, 45.9% Subordinated loans , 0.1% Others, 15.2% 1,776 983 1,528 1,564 500 1,000 1,500 2,000 2,500 3,000 3,500 Loan Deposit MNT Foreign currency MNT bn

180.8% LDR 97.7% LDR

• FinanceAsia 2016 “Best High Yield”
• FinanceAsia 2015 “Best Bank of Mongolia”
• FinanceAsia 2014 “Best Bank of Mongolia”
• FinanceAsia 2013 “Best Frontier Markets Bank”
• FinanceAsia 2012 “Best Bank of Mongolia”
• Euromoney 2015 and 2013 “Best Bank in

Mongolia”

• Global Banking & Finance Review

2015, 2014 and 2013 “Best Commercial Bank in Mongolia”

• GTR 2012, 2013, 2014 and 2015 “Best Trade

Finance Bank in Mongolia”

• Global Finance Magazine

2015 “Best Trade Finance Provider Mongolia”

• Asian Development Bank

2015 “Leading Partner Bank in Mongolia”

• The World Economic Forum honoured Trade and

Development Bank of Mongolia as a Global Growth Company

• Maintains 48 nostro accounts in 15 currencies at 31 top

rated foreign banks in 15 different countries

• Direct correspondent banking relationship with more than

150 foreign financial institutions

• Combined USD 675.1 million clean trade finance lines from

48 large foreign financial institutions (as of 3Q2016)

• Only Mongolian commercial bank which has arranged

syndicated club deals with foreign banks for MNT 58 billion and over USD 171.2 million since 2005

• Cooperation with MasterCard, Visa, JCB/Discover and Diners

International Recognition

20 international awards won since 2000 Cooperation with international FIs

20

Strong cross-border franchise, established network and recognized brand name

Source: Trade & Development Bank of Mongolia

Strong Execution Capability and Industry Expertise

Experienced Management Team

21

With extensive industry experience in Mongolia and overseas, the management team has successfully steered the Bank through growth and downturns

• Mr. Orkhon Onon

CEO

Over 19 years of experience

• Mr. Medree Balbar

President

Over 24 years of experience

• Mr. Randolph S. Koppa

Executive Vice Chairman

Over 50 years of experience  Top three executive officers have over 25 years TDB management experience in total, and have been managing TDB together for 9 years  Proven success in maintaining TDB’s strong leadership in corporate and international banking  Good mix of foreign and domestic banking experience  Successfully established strong relationships with a wide range of international financial institutions

• Mr. Khurelbaatar

Dambiijav

• Mr. Soronzonbold

Lkhavgasuren

• Mr. Orgodol Sanjaasuren
• Mrs. Otgonbileg

Demchigjav Deputy CEO and Chief Risk Officer

Over 19 years of experience

Deputy CEO Over 14 years of experience Deputy CEO Over 17 years of experience Deputy CEO Over 26 years of experience

Vision and Strategy

An experienced and dedicated management team:

Source: Trade & Development Bank of Mongolia

Maintain strong loan portfolio quality Focus on SME services expansion Target niche segments

• f retail market

Expand deposit base while retaining price leadership Strengthen internal controls, active risk mitigation Maintain corporate banking market leader position

 Offer broader range of loan

and deposit products

 Extend core corporate

competencies to SME sector

 Continue monitoring and improving the quality of loan portfolio  Keep enhancing internal processes such as credit due

diligence and loan approval process

 Prepare for an environment in which MNT

loan growth is higher

 Adapt to market conditions by shifting

loan-book exposure to sectors deemed more resilient

Clear and Focused Strategy

22

Remain focused on corporate banking with targeted expansion into retail & SMEs

 Enhance independent risk

management, risk-based internal audit and compliance procedures

 Strive to meet ethical

standards in all internal and external dealings

 Proactive measures such as

early re-classification of potential problem loans

 Remain the preferred financial institution for Mongolian

corporate customers

 Actively increase the range and quality of products and

services

 Target the employees of the

corporate and SME clients

 Increase niche electronic product

• fferings

 Focus on retail service for high net-worth individuals  Enlarge the deposit base to obtain

attractively priced MNT and USD deposits

 Leverage expertise in foreign exchange and

remittance to attract foreign customers

 Further broaden partnerships with

international banks

 Cross-sell other bank products

Source: Trade & Development Bank of Mongolia

• First Mongolian Bank to introduce an independent Risk

Management Committee

• Appointed Chief Risk Officer to oversee risk governance

framework reporting to the RGB and Risk Management Committee on quarterly basis

• Strive to apply Basel II / III principles for corporate loan

portfolio and to be the most advanced bank in Mongolia to move towards international banking standards

• Formally appointed Shagdarsuren Zuunai as independent

non-executive director on the RGB on 27 April 2012

• Established Audit Committee and Risk Committee in 2011
• Established General Audit Unit and Special Audit Unit to

provide independent and objective assurance and consulting services

• Based on PwC recommendations implemented

comprehensive compliance programmes

Robust Risk Management Framework

Market leader in risk management Strong corporate governance structure

23

Leading risk management framework & robust corporate governance structure

Monitors risk limits and provides day to day support to the two committees Regulatory Governing Board (“RGB”) Risk Management Committee (“RMC”) Chief Risk Officer (“CRO”) Risk Management Department Credit Committee (“CC”) Asset Liability Committee (“ALCO”) Operational Risk Management Unit Member of CC and ALCO Reports to

Risk governance framework

7.3% 65.8% 4.8% 20.0% 2.1%

Stable Ownership Structure

24

Stable ownership over time TDB strives to internationalize and diversify its shareholder base as demonstrated by Goldman Sachs Group’s 2012 equity investment

GS Mongolia Investment Limited Globull Investment & Development SCA US Global Investment LLC United Banking Corporation LLC Erdenebileg Doljin (Chairman) Minority Shareholders Goldman Sachs Group, Inc.

Trade and Development Bank of Mongolia

100% 100% 100%

Note: There has been some changes to the shareholding structure of the bank in June and July. Source: Trade & Development Bank of Mongolia

100%

Mongolia Macroeconomic Developments Banking Industry TDB Overview > Investment Summary

Investment Highlights

Source: Trade & Development Bank of Mongolia

Proven Reliability in Profitability and Efficiency throughout Business Cycles and Economic Slowdowns

2

Efficient Asset and Liability Management to Ensure High Quality and Liquidity

3

The “International Face

• f Mongolia”

4

Experienced Management Team with Proven Track Record

5

Mongolia’s Largest Corporate Bank, uniquely positioned to benefit from Mongolia’s long- term growth

1

Market Leader in Risk Management and Strong Corporate Governance

6

Contacts

27

Trade and Development Bank

14210 Peace Avenue 19 Sukhbaatar District 1st Khoroo Ulaanbaatar, Mongolia Swift: TDBMMNUB www.tdbm.mn Randolph Koppa

Executive Vice Chairman T +976 11 318970 ext. 1610 F +976 11 312418 E r.koppa@tdbm.mn

Orkhon Onon

CEO T +976 11 329087 ext. 1601 F +976 11 312418 E orkhon@tdbm.mn

Erkhembayar Baltsukh

Director International & Corporate Relations Department T +976 11 319943 ext. 1495 F +976 11 312418 E erkhembayar@tdbm.mn

Mongolia Macroeconomic Developments Banking Industry TDB Overview Investment Summary > Appendix

MNT’000 2013 2014 2015 3Q 2016 3Q 2016 (USD Millions)1 Interest income 321,438,593 444,673,852 532,856,753 434,605,536 190.3 Interest expense

• 200,692,181
• 296,489,329
• 358,520,676
• 292,018,294
• 127.8

Net interest income 120,746,412 148,184,523 174,336,077 142,587,242 62.4 Net fee and commission income 21,525,806 27,364,138 29,419,494 21,316,275 9.3 Other operating income (net) 68,684,766 30,882,990

• 15,192,458
• 10,323,905
• 4.5

Net non-interest income 90,210,572 58,247,128 14,227,036 10,992,370 4.8 Operating income 210,956,984 206,431,651 188,563,113 153,579,612 67.2 Operating expenses

• 44,477,351
• 68,785,944
• 91,417,672
• 59,189,154
• 25.9

Share of profit (loss) of an associate 204,056 1,085,417 12,569,455 7,167,715 3.1 Write back/(allowance) for impairment losses

• 8,255,683
• 44,749,513
• 46,976,039
• 46,892,659
• 20.5

Profit before tax 158,428,006 93,981,611 62,738,857 54,665,514 23.9 Income tax expense

• 19,164,321
• 474,447
• 1,263,569
• 205,837
• 0.1

Net profit 139,263,685 93,507,164 61,475,288 54,459,677 23.8

TDB Income Statement

29 Source: Trade & Development Bank of Mongolia Note: 1. MNT/USD rate of 2,284.39 as of Sep 29 2016 is used for 3Q 2016 USD conversion

MNT’000 2013 2014 2015 3Q2016 3Q2016(USD Millions)1 ASSETS Cash and due from banks2 1,090,245,012 1,054,739,557 694,959,701 1,126,456,800 460.2 Investment securities3 885,112,661 908,732,944 1,412,539,922 1,498,229,455 780.5 Investment in associates and joint ventures 10,416,001 14,530,077 46,763,866 50,886,072 28.2 Loans and advances, net 2,530,557,178 2,777,188,433 2,644,979,616 3,161,010,546 1,524.2 Bills purchased under resale agreements

• 99,799,000

124,188,909 50.0 Subordinated loans 7,000,000 4,000,000 4,000,000 4,000,000 2.0 Property and equipment, net 153,297,326 298,042,268 204,884,777 339,973,831 174.4 Intangible assets, net 4,270,615 4,542,466 1,449,739 3,851,844 1.1 Investment properties 33,388,245 33,689,000 99,789,000 99,789,000 50.8 Foreclosed real properties, net 6,057,155 1,020,454 1,370,810 1,292,675 0.7 Current tax assets

• 5,676,348
• 257,296
• Other assets

403,730,785 311,018,769 333,547,874 473,513,435 241.0 Assets held for sale

• Total assets

5,124,074,978 5,413,180,316 5,544,084,305 6,883,449,863 3,313.2 Deposits from customers 2,139,692,149 2,533,607,001 2,209,953,463 2,546,155,262 1,114.6 Deposits and placements by banks and other financial institutions 172,109,699 120,007,336 112,754,972 157,758,337 69.1 Bills sold under repurchase agreements 372,650,503

• 99,799,000

244,179,888 106.9 Borrowings 1,157,090,928 1,107,328,964 1,012,394,089 1,441,427,873 631.0 Current tax liabilities 7,646,234 361,331 4,385,983 765,754 0.3 Debt securities issued 460,563,148 741,354,845 1,175,921,345 1,471,594,634 644.2 Subordinated debt securities issued 66,036,156 75,351,569 29,939,700 22,843,900 10.0 Other liabilities 379,224,697 279,151,158 231,003,212 175,763,855 76.9 Total liabilities 4,755,013,514 4,857,162,204 4,876,151,764 6,060,489,503 2,653.0 Share capital 16,525,280 16,525,280 50,000,011 50,000,011 21.9 Share premium 19,272,456 19,272,456 19,272,456 19,272,456 8.4 Treasury shares

• 2,620,626
• 2,620,626
• Revaluation reserves

18,555,196 153,645,983 135,298,874 135,102,703 59.1 Accumulated unrealised gain (loss) on available-for-sale financial assets 14,153,606 27,487,697

• 23,831,129

49,568,190 21.7 Accumulated unrealised gain on valuation of cash flow hedges

• 39,938,362

63,706,483 27.9 Retained earnings 301,599,783 395,019,832 445,209,993 502,639,062 220.0 Total equity attributable to equity holders of the Bank 367,485,695 554,355,228 665,888,567 820,288,905 359.1 Non-controlling interests 1,575,769 1,662,884 2,043,974 2,671,455 1.2 Total equity 369,061,464 556,018,112 667,932,541 822,960,360 360.3 Total liabilities and equity 5,124,074,978 5,413,180,316 5,544,084,305 6,883,449,863 3,013.3

TDB Balance Sheet

30

Source: Trade & Development Bank of Mongolia Note: 1. MNT/USD rate of 2,284.39 as of Sep 29 2016 is used for 3Q 2016 USDm conversion

• 2. Cash and due from banks include Cash on hand, Deposits and placements with banks and other financial institutions, and Balances with the Bank of Mongolia
• 3. Investment securities include Held-to-maturity investment securities, Available-for-sale investment securities

Oyu Tolgoi copper and gold mine project

• USD 4.4 billion Oyu Tolgoi Underground Mine Development

and Financing Plan (OT Phase II) project financing facility was fully drawn down in May 2016 when the development of the underground mine in Phase II commenced

• IMF estimates OT will generate up to 1/3 of Mongolia’s GDP
• nce it reaches full production

Tavan Tolgoi coking coal mine project

• A consortium of Energy Resources LLC (Mongolia), China

Shenhua Energy (China) and Sumitomo Corporation (Japan) has been selected to develop the Tavan Tolgoi deposit

• Negotiations continue with respect to the proposed US$ 4.0

billion investment (and broader investment proposal) by the consortium and both parties are waiting for relevant approvals

Update on Key Development-Projects

31

Progress continues

Source: Oyu Tolgoi, Turquoise Hill Resources, Oyu Tolgoi Undergound Mine Development and Financing Plan, Erdenes Tavan Tolgoi, Erdenes Mongol, Government of Mongolia

Gatsuurt Strategic Gold Deposit

• On February 4, 2016, the Parliament approved a resolution

for the Government’s acquisition of a 34.0% interest in the Gatsuurt gold deposit, which is classified as a strategic deposit under the Minerals Law

• The development plan of this deposit is currently under

negotiation Tsagaan Suvarga and Khokh Tsav

• US$ 1.3 billion will be invested for the development of the

Tsagaan Suvarga copper-molybdenum concentrator project and the Khokh Tsav cement-lime plant project National railway network

• Construction of TT— Gashuun Sukhait line commenced in

May 2013 and the total construction for this line is approximately 50% complete

• On New Railway Project, US$196.2 million from proceeds of

the Chinggis Bonds and US$23.5 million has been disbursed by DBM. additional funding will be provided for this railway construction when the negotiations regarding the US$4.0 billion investment for Tavan Tolgoi are finalized Trans-Mongolian Highway

• The Government plans to build a 990-kilometer north/south

trans-Mongolian highway with an aim to sustain and promote the development of cross-border trades with China and Russia. The total investment planned is estimated to be US$5.0 billion

• Oyu Tolgoi is one of the largest high-grade copper deposit in

the world, located 80 km north of Chinese border

• Third largest copper mine after expansion
• Estimated 2.7 million tons of recoverable copper and 1.7

million ounces of recoverable gold in reserves

• Comprehensive Investment Agreement was signed in 2009
• Government of Mongolia owns 34% and Rio Tinto owns

66% through Turquoise Hill Resources

• Approximately US$ 6.2 billion invested in the first phase

development (OT Phase I) as of March 31, 2014

• Oyu Tolgoi started exporting copper concentrate from its
• pen-pit operation in July 2013
• In May 2015, Government of Mongolia and Rio Tinto signed

Oyu Tolgoi Underground Mine Development and Financing Plan (OT Phase II)

• USD 4.4 billion OT Phase II project financing facility

agreement is signed on December 15, 2015. The project financing was closed on May 25, 2016 with full disbursement and the underground work has commenced.

• Estimated US$ 6.8 billion capex, US$ 9.0 billion onshore

spending over 7 years during the OT Phase II development

• IMF estimates OT will generate up to 1/3 of Mongolia’s GDP
• nce it reaches full production

Update on mega-projects

Oyu Tolgoi copper and gold mine project Oyu Tolgoi’s key development in 2016

32 Source: Oyu Tolgoi, Turquoise Hill Resources, Oyu Tolgoi Undergound Mine Development and Financing Plan

• Shafts 2 and 5 related activities and construction of critical on-

site facilities continued, and the bulk excavation component for the conveyor-to-surface work stream has been completed.

• Oyu Tolgoi’s total in-country spend since 2010 crossed US$6.1

billion at the end of Q4 – demonstrating a strong, continuing commitment to local content in both operations and underground development, including US$760 million total spend in country in 2016

• Oyu Tolgoi spent 62 per cent of its total procurement

expenditures with Mongolian companies in 2016, equaling to US$279 million. With a focus on continuously increasing the Mongolian supplier participation in its supply chain

• Oyu Tolgoi is expected to produce 130,000 to 160,000 tonnes
• f copper in concentrates and 100,000 to 140,000 ounces of

gold in concentrates for 2017.