The Center for Economic Research and Reforms (CERR) has developed the Banking Activity Index for 31 commercial banks in Uzbekistan. CERR updates the rating of banks on a quarterly basis, based on this Index. The purpose of the study is to monitor changes in the share of the private sector in banking assets and to assess the effectiveness of ongoing reforms and transformation processes in the banking sector in the country.
Uzbekistan aims to reduce state share in the banking sector. This is stipulated by the Presidential Decree on the Strategy for Reforming the Banking System of the Republic of Uzbekistan for 2020-2025. It is envisaged to reduce the State’s share of the banking system from the current 85 percent to 40 percent by 2025.
In the coming years the State shares in Ipoteka-Bank, Uzpromstroybank, Asaka Bank, Aloqabank, Qishloq Qurilish Bank and Turonbank will be gradually realized. Prior to this, it is planned to increase their effectiveness with the assistance of international consultants. For this purpose, the Project Office on the Transformation and Privatization of Commercial Banks with a Government Share has been established under the Ministry of Finance.
As of December 1, 2021, the assets of the banking system of the republic accounted for 427.4 trillion sums (an increase by December 1, 2020 - 21.9%), liabilities amounted to 360.3 trillion sums (an increase of 23.2%), total capital - 67 trillion sums (an increase of 15.7%). Today, the banking system employs about 56,000 people.
In the CERR study, banks were divided into two groups - large and small. The rankings are compiled separately for each of these groups. At the same time, the group of small banks includes banks operating only in Tashkent city (or only in one region).
Rating of activity of large banks for the IV quarter of 2021
Among 17 large banks, Asia Alliance Bank improved its position by 2 points and took the 6th place. The bank maintains good results in terms of financial intermediation (2nd place), potential profitability (5th place) and liquidity (3rd place). However, the results of the rating show that Asia Alliance Bank should pay attention to capital adequacy and asset quality indicators.
Ipak Yuli Bank was ranked the seventh in the overall ranking. This bank entered the top five banks in terms of financial accessibility (5th place) and potential profitability (2nd place). The rating of the bank on financial intermediation (15th place) indicates the need to improve the ratio of term deposits to loans, borrowings from other banks and financial organizations, as well as obligations to the Ministry of Finance.
Aloqa Bank dropped by one point in the rating and took 8th place. Despite the decline, this bank shows the best results among banks with a state share. In particular, the bank retained fourth place in financial intermediation. It is also one of the leading banks in terms of the quality of banking assets (6th) and financial sufficiency (7th).
Capital adequacy indicators show that particular attention should be paid to the ratio of total regulatory capital (Tier 1 capital) to risky assets.
Agrobank moved up in the overall ranking to 10th place (+1 point). Positive changes were observed in financial intermediation (+2 points), management efficiency (+2 points) and liquidity (+2 points). It was also ranked among the top five banks with the financial access and capital adequacy. However, the bank’s performance in management efficiency (14th place) and profitability (15th place) remains low compared to other banks.
The largest increase of the overall rating was observed in Qishloq Qurilish Bank (11th place). A significant increase in the amount of loan portfolio issued by this bank, as well as an improvement in liquidity indicators, ensured the growth of the bank in the rating by 5 points at once. However, the bank's profitability ranking (16th) shows that attention should be paid to the ratio of net interest income to assets and interest expenses and the share of interest-free income in total income. Despite the fact that Uzpromstroybank retained its results in the 3rd quarter, the high results achieved by Agrobank and Qishloq Qurilish Bank led to the bank dropping to 13th place in the overall ranking.
Activity rating of small banks in the IV st quarter of 2021
In the IV quarter of this year Davrbank and Ziraatbank retained their positions in the ranking of Uzbekistan's 14 small banks, and Universal Bank was forced to cede its position to Anorbank.
TBS Bank moved up 2 points in the overall rating and took 6th place. This was due to a significant improvement in the bank's financial intermediation performance.
Khalilullokh Khamidov, Head of the Sector, the CERR
Tel: (78) 150 02 02 (410)
Public Relations Service CERR