Fitch: Uzbekistan’s Banking Sector Strengthens Amid Ongoing Reforms
Uzbekistan’s banking environment has significantly improved, driven by regulatory reforms, improved governance and sustained efforts to reduce structural risks, according to Fitch Ratings. The agency has revised its outlook on the banking sector’s operating environment (OE) score to ‘positive’, citing rising resilience and robust economic growth, projected at 6.3% in 2025–2026.
As a result, Fitch also changed the outlooks of Kapitalbank and Ipak Yuli Bank to Positive, noting they are best positioned to benefit from the improving conditions. While widespread rating upgrades are unlikely without stronger financial metrics, select banks could see improved viability ratings if reforms continue.
Since launching banking reforms in 2020, Uzbekistan has privatised Ipoteka Bank and transferred minority stakes in other state-owned banks to the National Investment Fund, managed by Franklin Templeton. These steps are aimed at reducing state dominance and boosting governance.
Key sector trends include:
- Retail loan growth slowed to below 20% in Q1 2025 (from 46% in 2022–2023)
- Dollarisation of loans and deposits dropped to 42% and 24%, respectively
- Non-performing loans remained low at 4%, while capital adequacy stood at 18%
Fitch recently upgraded Uzbekistan’s sovereign rating to ‘BB’/Stable, prompting upgrades for eight state-owned banks. The outlook for the sector remains positive, underpinned by continued reform and strong macroeconomic fundamentals.
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