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Triodos Investment Management completes sale of equity stake in XacBank, Mongolia

04-11-2013 | Triodos Investment Management, together with other investors, has sold the majority of its 13.5% equity stake in TenGer Financial Group, the holding company of Mongolia’s XacBank, to new strategic investors including ORIX Corporation, IFC and MAK.  Through its funds Triodos-Doen and Triodos Fair Share Fund, the global impact investor has been a shareholder with an active role at board level since 2004. The primary rationale behind the sale is that XacBank has achieved a level of maturity as a fully-fledged bank, in terms of its outreach, governance, risk management and performance.

Long-term relationship

Frank Streppel, Deputy Director Emerging Markets at Triodos Investment Management: ‘Our long-term relationship with XacBank shows how Triodos Investment Management supports financial institutions to achieve the next level of development. We are proud to have been closely involved in XacBank’s journey to evolving into the bank it is today. We feel this is the right time for other strategic investors to step in. We are confident that this diverse and reputable group of new investors brings valuable expertise to the further sustainable growth and development of the bank. Triodos Investment Management will continue its relationship with XacBank by maintaining a minority shareholding and by providing debt financing.’

Mongolia's fourth largest bank

XacBank started in 1998 as a non-governmental microcredit organisation supported by the United Nations Development Program. In 2002, it became a fully licensed commercial bank with a strong focus on Mongolia’s low-income and remote rural populations. XacBank now is the country’s fourth largest bank in terms of assets and gradually moving into SME and corporate lending. 

Bold Magvan, Chief Executive Officer of TenGer Financial Group: ‘We very much value the sustainable banking expertise and knowledge that Triodos has brought to the table in the past decade. Also their introduction to international networks such as the Global Alliance for Banking on Values allows us to further promote sustainable banking in Mongolia and the rest of the region. We are looking forward to continuing this journey together with our new strategic partners.’

Strategic investors

One of the new strategic investors is ORIX Corporation, a Japan-based financial services group with operations in ASEAN and East Asia, Australasia, the Greater China regions, the Middle East, United States and Europe. ‘ORIX Corporation’s investment in TenGer Financial Group is a sign of improving investor sentiments towards Mongolia. We see the Mongolian financial sector as a key growth market, and TenGer Financial Group as a partner who has the reputation, historic performance, customer and branch base, corporate governance and team with which to further access that market’, commented Yoshiaki Mutsuoka, Managing Director at ORIX Corporation.

Enclude Capital Advisory acted as Financial Adviser to the sellers on the transaction, and Michelmores LLP acted as Legal Adviser to the sellers.  

About Triodos Investment Management

Triodos Investment Management is a 100% subsidiary of Triodos Bank, one of the world’s leading sustainable banks. Triodos Investment Management is a globally recognised leader in impact investing, managing direct investments ranging from sustainable energy infrastructure to microfinance institutions. Since 1994, its assets under management in inclusive finance have increased to over EUR 500 million, making it one of the leading investors in the industry. Through specialised funds it currently provides finance – both debt and equity - to 103 upcoming and well-established financial institutions in 45 countries. They hold equity stakes in 21 financial institutions; senior staff of Triodos Bank joins the Board of Directors and actively contributes to the governance of these institutions.

About TenGer Financial Services and XacBank

TenGer Financial Group, (TenGer), founded in 2001, is a major financial services holding company in Mongolia. It offers banking, leasing, insurance and investment banking services. Its main asset is XacBank, Mongolia’s fourth largest commercial bank by assets. Other assets include XacLeasing, Tenger Insurance, TenGer Capital investment banking, and micro-credit, software development, and security services companies. More information: www.tengerfinancialgroup.com and www.xacbank.mn

About ORIX Corporation

ORIX Corporation (TSE: 8591; NYSE: IX) is an integrated financial services group based in Tokyo, Japan, providing innovative value-added products and services to both corporate and retail customers. With operations in 34 countries and regions outside of Japan, ORIX's activities include corporate financial services, such as leases and loans, as well as automobile operations, rental operations, real estate, life insurance, banking and loan servicing. More information: www.orix.co.jp/grp/en/

One of the clients of XacBank in Mongolia

One of the clients of XacBank in Mongolia