How Fitch Ratings’ 2026 Outlook for “CIS+” Banks Reflects on Uzbekistan’s Banking Sector
A recent report by Fitch Ratings covering the banking sectors across the «CIS+» group of countries, among them Uzbekistan, Kazakhstan, Armenia, Georgia, Azerbaijan and Ukraine, paints a cautiously optimistic picture for 2026.
Regional Banking Outlook: «Neutral» but Stable
Fitch assigns a «neutral» sector outlook for banks across most markets in the CIS+ region. The agency expects real GDP growth of 4.6–6.3% in key economies such as Uzbekistan, Kazakhstan, Armenia, and Georgia next year—factors seen as supporting banks’ credit fundamentals. Overall, core credit metrics, such as profitability, liquidity and capital adequacy, are forecast to remain broadly stable for the region’s banks.
What This Means for Uzbekistan
As one of the region’s fastest-growing economies, Uzbekistan stands out in Fitch’s assessment. The agency expects loan-impairment charges at Uzbek banks to rise slightly in 2026 as lenders continue recognising legacy credit risks. At the same time, Fitch notes that capital ratios should remain broadly stable, supported by internal capital generation and favourable macroeconomic conditions. However, the report also highlights that many banks in Uzbekistan remain heavily reliant on external wholesale funding and government support. This dependence leaves them more exposed than peers in countries with more diversified and resilient funding structures.
Macro Factors at Play: Growth, Risk and Regional Dynamics
Fitch highlights several regional factors that will influence bank performance across the CIS+ space:
- Economic growth across the region (especially in Central Asia) is expected to support healthy credit growth and stable demand for banking services.
- Commodity price fluctuations and geopolitics, particularly related to Russia, remain key external risks for many markets, which may affect investor sentiment, capital flows, and trade.
- In consumer finance, regulators in several countries (including Uzbekistan) have introduced tighter lending standards to curb potential overheating, measures such as limits on unsecured loans and debt-to-income ratios.
Why This Matters for Uzbekistan’s Economy
For Uzbekistan, where economic transformation and structural reforms continue, the Fitch outlook highlights both opportunities and challenges ahead. A stable banking sector remains essential for supporting economic growth, investment and private-sector development.
At the same time, the ongoing recognition of legacy loan problems indicates that banks, particularly state-owned institutions, must maintain strong oversight of credit quality and risk management. The report also notes that many Uzbek banks rely heavily on external or wholesale funding, underscoring the need to diversify financing sources and build more resilient funding structures.
Given the backdrop of national reforms, including in energy, public-private partnerships and banking regulation, the Fitch report offers a realistic benchmark for Uzbekistan’s banking sector going into 2026.
Kursiv Uzbekistan also reports how Deputy Chairman of the regulator Abror Mirzo Olimov explains the country’s reserve management strategy.
