Хураангуй:
The purpose of this study was to predict the bankruptcy of Mongolian commercial banks using the Z’’-Score Model originally introduced by Altman (1983). This model was originally applied for small and middle-sized US manufacturing bankrupt and non- bankrupt firms but is applied widely all over the world in different industries and for different size categories for different purposes. For the purpose of investigation, the data for the population of 12 commercial banks that are different in terms of size and public participation. These banks tend to demonstrate good financial performance, and none of them default during the period of the analysis (2015-2019). In the empirical analysis and result section concluded that some banks under the study are predicted to have a risk of bankruptcy according to the results of the Altman Z-Score model. In 2015, 2016 and 2017 there were 12 banks that are in a healthy condition is indicated by the results of the Z-Score were above 2.60. Whereas in 2018 there were 11 banks in “Safe Zone”, and National Investment bank was in “Gray Area”. Furthermore, some banks Z-Score were significantly higher than other banks, which are Credit Bank and Trans Bank. And in 2019 there were 11 banks that are in good condition, and National Investment bank was in a state of bankruptcy. The average Z-Score for all 12 Mongolian commercial banks is recorded with 3.71 in 2019, and according to the zone of discrimination for Altman model of service 3.71 lies in the “Safe Zone”. In conclusion, the bank which has possibility to go bankrupt need to improve their management and liquidity and find another way to cover their losses, moreover central bank should supervise and tighten the policy for commercial banks.
