- NBC pays $15 million for stake in XacBank holding company
- Share sale proceeds to be used for business education
National Bank of Canada has paid $15 million for a 10.5 percent stake in the holding company that controls XacBank LLC, one of Mongolia’s top four banks.
The purchase of a stake in XacBank parent, micro-lender TenGer Financial Group, was completed last week, Marie-Pierre Jodoin, head of public affairs and investor relations at the National Bank of Canada, said in an e-mail.
“XacBank is known for its financial soundness, good governance standards and risk management. This is a tactical investment done via our current long-term portfolio,’’ Jodoin said.
Some 7.5 percent of the XacBank stake was purchased from the Portland-based U.S. charity Mercy Corps. The remaining 3 percent came from International Finance Corp. and other shareholders, said Jodoin.
Mercy Corps said in a press release that it will use proceeds from the share sale to fund business educational programs in rural areas. TenGer has been working since it was set up in 2001 to help Mongolia’s nomadic herders and small business owners open savings accounts and tap into credit lines. The program has received $1 million in funding from the U.S. government, according to Mercy Corps.
The share sale is the first strategic investment by a foreign commercial bank in the Mongolian banking system, according to Ulaanbaatar-based advisory firm NovaTerra, which advised Mercy Corps on the deal.
— With assistance by Michael Kohn