Uzbekistan's banking sector is facing a challenge with a nearly 20% increase in non-performing loans (NPLs), totaling UZS 16.6 trillion (about $1.3 bn) as of January 1, 2024, according to the Central Bank of Uzbekistan. State banks are significantly affected, holding UZS 13.2 trillion ($1.06 bn) of the total NPLs, while commercial banks account for UZS 3.3 trillion ($264 mn).
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Breaking down the figures, report shows that state banks shoulder a substantial portion of the NPL burden, accounting for UZS 13.2 trillion (approximately $1.06 bn), while commercial banks contribute UZS 3.3 trillion ( approximately $264 mn) to the total . Among state-owned banks, the Business Development Bank and Xalq Banki emerge with the highest proportions of problem loans, standing at 8.9% and 7.6%, respectively.
However, the landscape of non-performing loans within private financial institutions presents its own set of concerns. Octobank and Saderat Bank Iran stand out with alarming percentages of NPL, with rates reaching 85.2% and 17.6%, respectively. These figures underscore the need for stringent measures to address loan quality and risk management practices within these entities.
A closer examination of NPLs from commercial banks provides further insights. The data reveals a loan portfolio totaling UZS 471 trillion ($37.7 bn), with problem loans accounting for UZS 17 trillion ($1.3 bn), representing a 3.5% share. Within this segment, banks with state shares exhibit varying degrees of NPL ratios. The National Bank of Uzbekistan, for instance, reports a problem loan share of 3.1%, while Asaka Bank and Xalq Banki register higher figures at 4.4% and 7.6%, respectively.
Meanwhile, a diverse array of private and commercial banks presents a mixed picture in terms of NPL percentages. Notably, Kapitalbank and Trastbank report problem loan ratios of 1.4% and 2.0%, respectively, reflecting relatively stable loan portfolios. However, the report highlights concerning trends in banks such as Madad Invest Bank and Octobank, where NPL ratios soar to 13.2% and a staggering 85.2%, respectively.
Earlier Daryo reported that during a meeting on January 16, President Mirziyoev emphasized the potential for recovering Non-Performing Loans (NPLs) and highlighted the availability of significant resources totaling UZS 25 trillion (equivalent to approximately $2.03 bn).
The Central Bank of Uzbekistan reported that as of December 1, 2023, Uzbekistan's banking sector, including both state-owned and private institutions, is confronted with the challenge of non-performing loans (NPLs), amounting to a total of UZS 17.6 trillion (approximately $1.4 bn), which represents 3.8% of the overall loan portfolio valued at UZS 465.5 trillion (approximately $37.6 bn).
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