TEXT-Fitch affirmed Mongolia's XacBank at 'B';outlook stable | Reuters: "Nov 20 - Fitch Ratings has affirmed Mongolia-based XacBank LLC's (XacBank) Long-Term Issuer Default Rating (IDR) at 'B' and its Short-Term IDR at 'B'. The Outlook is Stable. A full list of rating actions is provided at the end of this commentary.
The ratings capture XacBank's ongoing business model changes and the likely pressure this will bring on its asset quality, liquidity and capital. XacBank, a traditionally microfinance institution, is increasing riskier SME lending which will likely lead to higher loan concentration and impairment rates (H112: 1.8% as per IFRS, 2011: 1.2%). In addition, it increases XacBank's vulnerability to changes in the operating environment and the economy due to the nature of SME lending and the bank's limited expertise in the area."
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