Tashkent, Uzbekistan (UzDaily.com) —  An analysis of the banking sector conducted by the Center for Economic Research and Reforms (CERR) shows that while Uzbekistan’s banking sector is stable, it also faces several challenges requiring attention. Improving liquidity and financial stability remains a key factor in building trust among customers and investors.

The CERR has updated the "Bank Activity Index" for the third quarter of 2024, covering 31 commercial banks in the country. The index is calculated considering the classification of banks into 17 large and 14 small ones, based on their operational volumes.

The index is based on 27 coefficients, enabling a comprehensive analysis and comparison with the national averages, as well as compliance with the requirements of the Basel Committee. This ranking serves as an important tool for assessing the resilience of Uzbekistan’s banking sector, contributing to the further development of the country’s financial system.

The main goal of this research is to monitor the dynamics of the private sector’s share in banking assets, evaluate the effectiveness of ongoing reforms, and assess transformation processes in the banking sector.

Ranking of large banks’ activity in the third quarter of 2024

In the third quarter of 2024, stability was observed among the largest banks in Uzbekistan, indicating the sector’s growing resilience. The retention of top six positions in the ranking and the improvement of some banks, such as "Microcreditbank" and "Uzpromstroybank," signal positive changes in their financial attractiveness and liquidity. However, several large banks faced challenges and needed to adapt their management strategies.

Four of the 17 leading credit institutions failed to maintain their positions, while three banks improved their rankings. Ten market participants retained their positions, indicating increased competition in the sector. While previously, banks showed more movement in the rankings, now the ranking stabilizes, reflecting the growing stability of the players.

The top six largest banks retained their positions in the ranking: "Kapitalbank," "Trustbank," "Asakabank," "Hamkorbank," "Ipak Yuli," and "Orient Finance Bank."

"Microcreditbank" demonstrated the best result this quarter, rising by two places to occupy 11th in the ranking.

"Uzpromstroybank" also improved its overall ranking, moving up by one position due to its enhanced financial attractiveness and asset quality. Additionally, this bank increased its liquidity, moving up three positions in this category, indicating the bank’s stability.

Analysis showed that one of the country’s largest state banks, "Khalq Bank," rose by one position in the overall ranking, attributed to its improved financial attractiveness and liquidity.

At the same time, "UzNatsbank" lost one position in the overall ranking, falling one place due to decreased performance in management efficiency (down two points) and liquidity (down one point).

Additionally, "BRV" dropped four points in financial intermediation, which led to a one-position drop in the overall ranking.

"Agrobank," another state bank, lost one point in the overall ranking due to declines in three key indicators: financial attractiveness, capital adequacy, and liquidity, each dropping by one position.

Furthermore, in terms of financial intermediation, which includes the ratio of deposits to loans and liabilities to other banks and the government, "Microcreditbank" lost two positions, and "BRV" lost four positions.

"Orient Finance Bank" showed weak results in financial accessibility, remaining in last place in the ranking (17th place), which may indicate a lack of customers or low loan volumes, negatively impacting the bank’s competitiveness.

In terms of asset quality (ROA, NPL indicators), "Ipotekabank" lost one position and ranked last in this indicator.

In the same indicator, "Trustbank" dropped by four positions, while "Kapitalbank," "Hamkorbank," "Microcreditbank," and "Turonbank" each dropped by one position, which may indicate difficulties in attracting clients and issuing loans.

In terms of profitability, "Asakabank" ranked last, while "Asia Alliance Bank" moved up by one position.

In management efficiency, "Turonbank" ranked last. Also, among large banks, "Ipotekabank," "UzNatsbank," and "Asia Alliance Bank" fell by three positions each, while "Uzpromstroybank" fell by one position, possibly indicating high operational costs or low staff productivity.

In terms of liquidity, "Agrobank" lost one position, falling to the last place. "Asakabank" also lost four positions, ranking 16th. "Orient Finance Bank" dropped seven positions in this category, and five other commercial banks lost one position each. These changes may signal the need to improve liquidity positions to enhance financial stability and ensure trust from customers and investors.

Ranking of small banks’ activity in the third quarter of 2024

In the third quarter of 2024, the ranking of small banks showed the following dynamics: four financial institutions improved their positions. "Yangi Bank" showed the best result, rising by five points to rank 8th in the overall ranking.

Additionally, four commercial banks increased their positions by one point, indicating positive changes in their operations. Notably, five of the 14 banks, including "Universal Bank," "TBC Bank," "Ziraat Bank," "Poytakht Bank," and "Tenge Bank" maintained their positions, indicating their stability.

However, four financial institutions showed worse results, possibly due to various factors, including market conditions and internal operational issues.

While "AVO Bank" showed the most significant growth in the second quarter, rising by three points, it lost four points in the third quarter in the overall ranking of small banks.

Conclusion

The analysis of the third quarter of 2024 shows that Uzbekistan’s banking sector demonstrates significant stability and resilience among both large and small banks. The largest financial institutions retain their positions in the ranking, indicating market maturity and the ability to adapt to changes in the external environment.

The improvement of individual banks’ performance highlights positive trends in financial attractiveness and liquidity.

In the small banks segment, active movement is observed. At the same time, the constant need for monitoring and adapting management strategies remains relevant, allowing all market participants to strengthen their positions and enhance overall financial stability.