ING has a willingness to do business off the beaten track. Having finally closed its rep office in Pyongyang, it has now gone into another Asian country not usually frequented by foreign banks. The Trade Development Bank of Mongolia (TDB) has signed an agreement with ING to advise it on key aspects of its business.
The agreement is with ING's financial institutions' institutional and governments advisory group and will last for three years. Under the terms of the agreement, ING will appoint a CEO and a COO to the bank as well as provide officers in the credit and risk management divisions, retail banking, treasury, HR and IT departments.
It is yet to be decided who will take on the job of CEO but the COO position will be taken by Dennis Openshaw, a long time ING officer who has performed similar COO roles at banks around the world.
ING has made a decent business in Asia out of this type of work. Recently the bank completed a two year contract with Lippo Bank in Indonesia during which time the latter's share of the national savings market nearly doubled and its returns on equity sharply improved. That contract expired last year, but recently IBRA retained ING to advise it on the sale of IBRA's stake in Lippo Bank.
ING has also worked in a similar capacity with Chang Hwa Commercial Bank in Taiwan, Siam Commercial Bank in Thailand and the Sri Lanka Insurance Company.
The bank's relation with TDB in Mongolia comes about through the US commodity company Gerald Metals, which is a client of ING. Gerald Metals, along with Banca Commericale Lugano formed a consortium that bought a 76% stake in TDB from the government in December 2002. The bank is the largest in Mongolia and is heavily involved in the country's rapidly expanding natural resources sectors.