The outlook for Uzbekistan’s banking sector remained stable in 2024, according to an analysis by Moody’s Rating Agency. Despite an increase in problem loans, state support for large banks was expected to continue, ensuring financial stability.
In 2024, the share of problem loans in Uzbekistan’s banking system rose to 7% due to state-owned banks recognizing problem assets. However, this figure was expected to remain in the 6-7% range over the next 12-18 months.
The total capital-to-risk-weighted assets ratio, excluding additional state capital, was projected to stay between 14-15%, compared to 14.3% at the end of 2023.
By the end of 2024, the loan-to-deposit ratio reached 173% across the sector, with state-owned banks at 237% and private banks at 108%. Market financing largely consisted of long-term liabilities, reducing refinancing risks. However, a high proportion of foreign currency liabilities and deposits exposed the sector to exchange rate fluctuations.
Moody’s noted that the likelihood of state support for large banks remained very high. Despite ongoing privatization plans, the government retained control over key financial institutions such as Agrobank (Ba3, stable) and Mikrokreditbank (Ba3, stable), both of which played significant roles in economic policy implementation.
Since 2018, approximately $1.8bn in capital had been injected into state-owned banks. By the end of 2024, the total assets of Uzbekistan’s banking sector reached $59.5bn, equivalent to 53% of GDP.
The five largest banks collectively controlled 54% of the market, while state-owned banks held 65% of total assets. The creditworthiness ratings (BCA) of 13 commercial banks, representing 62% of the sector’s assets, ranged from b1 to baa1, with a weighted average rating of b2.
Uzbekistan’s banking system is supported by strong national reserves, equivalent to 37% of GDP. Additionally, total loans in the sector also account for 37% of GDP, indicating the government’s capacity to sustain economic and financial stability.
Despite geopolitical challenges, including the Russia-Ukraine conflict, the Uzbek economy remains resilient. According to Bankers.uz, citing Moody’s data, real GDP growth is projected to stay at 5.7% in 2025-2026, which is expected to positively impact borrower solvency and overall financial sector health.
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