Strictly Confidential

Strictly confidential

Financial Gateway to Mongolia

Amar Hanibal, Managing Director

1

TenGer Financial Group

1. TenGer Financial Group is a portfolio of financial service businesses spanning microfinance, insurance, consumer and business lending, savings, advisory, and payment services

2. Given the relatively small size of the economy and financial service sector, the diversified strategy of TFG provides for a more balanced exposure to the real economy

3. In growing economy such as Mongolia, the financial sector closely tracks the economic growth and accompanying income accumulation

4. Attractive risk/return to both fixed income and equity investors

2

Mongolia: bank-centric intermediation

Mongolia has been and will remain dependent on bank ing intermediation

9.3%

57.2%

55.7%

0%

10%

20%

30%

40%

50%

60%

70%

2009 2010 2011 2012 Q3, 2013

Market cap to GDP ratio Deposit to GDP ratio Loan to GDP ratio

1,6202,108

1,6882,267

3,1263,627

3,8814,116 4,324

4,4274,826

5,118

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Growth

3

Source: IMF, WEO, October, 2013

GDP Per Capita (USD)

480 530 610 760

900 1,120

1,400

1,800 1,790 1,900

2,340

3,160

-

500

1,000

1,500

2,000

2,500

3,000

3,500

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: World Bank, World Development Indicators, Sep., 2013

GNI per capita, Atlas method(current USD)

• The economic development is gradually increasing income and wealth of the population

• Increasing household incomes lead to demand for more sophisticated financial services

• SMEs are growing source of growth

• Banking role in the system is increasing

4

FI’s as vehicle for investment in Mongolia

Why FIs:1. Diversified play on the economy2. Growth tracks GDP at 2-3 multiple3. Institutionalized risk management4. Regulated business

However, the following conditions have to be met in order to follow this investment strategy:1. Corporate governance2. Professional management3. Financial discipline4. Balanced shareholding structure

5

Strictly confidential

TenGer Financial Group holdings

100% 100% 100%100%

Selected unaudited financials (Q3 2013 YTD)

� Total Assets: MNT 1,631 billion (USD 1.0 billion)� Total Equity: MNT 151 billion (USD 92 million)

51%

The only financial Group in Mongolia that can offer a full financial services package

80%

Commercial Banking

Leasing Services

Security Services

IB and brokerage

Microcredit (China)

General Insurance

FX MNT / USD 1,655.44 as of Sep 30th, 2013

6

Example: Integrated solutions for SME’s and Corporates

Net Working Capital Inventory PP&E Short Term Debt Long Term Debt Equity

� Cash & Treasury

� Trade andcommodity Finance

� Corporate Card

� Clearing bank

� Forex hedging

� Casualty Insurance

� Liability Insurance

� Equipments Leasing

� Sale & Lease-back

� Physical Protection

� Alarm Security

� Working capital Loan Facility

� Revolving Credit Line

� Long term financing raised from IFIs

� Advisory (valuation)

� IPO

� Private Equity

Assets Liabilities & Equity

7

FI’s as vehicle for investment in Mongolia

Why FIs:1. Diversified play on the economy2. Growth tracks GDP at 2-3 multiple3. Institutionalized risk management4. Regulated business

However, the following conditions have to be met in order to follow this investment strategy:1. Corporate governance2. Professional management3. Financial discipline4. Balanced shareholding structure

8

TFG: corporate governance

1. Balanced mix of board directors representing Mongolian, international and minority investors.

2. Effective board

3. Conservative risk appetite– Quality of earnings

– Sufficient reserves

4. Solid foundation of risk management

5. Prudent capital structure – CAR 17.7% vs. 15.85% average for systemic banks.

Strong international shareholder base

9

Highest level of Corporate Governance due to reputa ble global investors

NameEntityOwnership

Mongolyn Alt Corporation (MAK)20.0%

The International Finance Corporation (IFC)

19.2%

ORIX Corporation15.5%

The European Bank for Reconstruction and Development (EBRD)

11.6%

Ronoc10.2%

EIT Capital Management10.1%

Mercy Corps7.6%

Major Shareholders (above 5%)Major Shareholders (above 5%) RatingsRatings

B1 (stable)

B (stable)

SP: 3

10

2.4

6.7

12.9

15.918.3

0

4

8

12

16

20

2009 2010 2011 2012 Q3,13

YTD Profit after Tax

MNT B

MNT 18.3B

321 475

834

1,124

1,631

0200400600800

1,0001,2001,4001,6001,800

2009 2010 2011 2012 Q3,13

Assets

MNT 1,631BMNT B

8.6

18.5 20.9

15.6 17.3

0

3

6

9

12

15

18

21

2009 2010 2011 2012 Q3,13

%

17.3%ROaE (ordinary shares)

3,594 4,270

6,104 7,057

8,275

01,0002,0003,0004,0005,0006,0007,0008,0009,000

2009 2010 2011 2012 Q3,13

Book Value per share

MNT 8,275MNT

5.9

11.0

13.1

11.4

13.4

2.0

4.0

6.0

8.0

10.0

12.0

14.0

2009 2010 2011 2012 Q3,13

Profit Margin

13.4%%

19.3

30.8

51.0

68.8 65.2

0

20

40

60

80

2009 2010 2011 2012 Q3,13

YTD Operating Income

MNT 65.2BMNT B

Consistent financial performanceUSD 11.1 MMEUR 8.2 MM

USD 985 MMEUR 729 MM

USD 5.00EUR 3.70

USD 39.4 MMEUR 29.2 MM

Sep.30.2013 BoM MNT/USD rate: 1,655.44Sep.30.2013 BoM MNT/EUR rate: 2,235.92

11

285

186163146

50

100

150

200

250

300

2008 2009 2010 2011 2012 Q3, 2013

Past 5 years

TFG BVPS S&P 500 MSCI Emerging Markets FTSE 100

390

115

81100

0

100

200

300

400

2007 2008 2009 2010 2011 2012 Q3, 2013

Past 6 years

TFG BVPS S&P 500 MSCI Emerging Markets FTSE 100

Financial returns: TFG vs. Major IndicesAs of December 31st for each year

Past 6 yrs. Alpha CAGR

TFG 26.7%

S&P 500 276% 2.4%

MSCI EM 309% -3.5%

FTSE 100 290% 0.0%

Past 5 yrs. Alpha CAGR

TFG 24.7%

S&P 500 99% 14.0%

MSCI EM 122% 10.9%

FTSE 100 139% 8.3%

As of December 31st for each year

12

Conclusion

1. Financial institutions such TFG will continue to play key role in the growth and development of the economy

2. FIs do provide an attractive entry point to the long-term economic success of Mongolia, subject to caveats

3. TFG and its subsidiaries are reliable and prudent partner for investors in Mongolia

4. Offers range of services that any investor may require

5. An investment that will require patience