Standard & Poor's analyst: Development of Uzbek banking sector to determine quality of assets

Uzbekistan, Tashkent, September 3 / Trend D. Azizov /

The relative isolation of Uzbek banks from international financial markets and low proportion of their foreign borrowings, compared to other countries, including neighboring Russia, Ukraine and Kazakhstan, defended the banking system of the negative processes that take place in the global markets, analyst of international rating agency Standard & Poor's Mikhail Nikitin said in an interview UzDaily.uz

"In his view, the second point, which also has a positive character - this is painstaking work by the Uzbek government to support and regulate the banking sector.

"We understand that regulators carry out the constant, almost daily control over the banking system. And, in principle, still the history of this regulation is positive - especially in the sense that no default on foreign loans Uzbek banks was not "- said Nikitin.

However, these factors do not guarantee that the banking system of Uzbekistan is protected from risks. Risks exist. They relate primarily to the quality of assets, S & P analyst said.

"Taking into account that there was no fall during the financial crisis, it positively characterizes the economic policy of the uzbek Government ", he said.

Moreover, the banking system in Uzbekistan is one of few in the world. It demonstrates the growth of lending that takes place mainly at the expense of measures to stimulate the state economy, aimed to reduce the impact of the crisis.

"A key factor that will largely determine the further development of the banking sector of Uzbekistan, will be the quality of assets, i.e financial state of borrowers and how they will handle loans," Nikitin said.

Standard & Poor's is the authoritative global rating agency specializing in providing independent high-quality services on credit rating, the publication of analytical and reference materials for the world financial market.

Standard & Poor's has been providing services to the banking sector of Uzbekistan since 2008.

S & P delegation visited Uzbekistan to hold the annual meeting with representatives of banks, which have a rating agency, in late August 2010.

At present, the company has assigned credit ratings to four banks of Uzbekistan - Kapitalbank, People's Bank, National Bank and UZPROMSTROYBANK.

In July this year S & P affirmed long-and short-term credit ratings of "Kapitalbank" at level "B" and "C" with negative outlook assigned in August 2009, the agency said.

The bank's assets increased by 81.5 percent - up to 403.04 billion soums, credit portfolio - by 12 percent, up to 150.36 billion soums, the equity of the bank - doubled up to 42 billion soums in 2009.

The bank was created in 2000.

S & P assigns State People's Bank of Uzbekistan with rating "B / B", the forecast - "stable" in August 2009.

The bank's assets in 2009 increased by 1,7 times - up to 877.7 billion soums, the loan portfolio - 77 percent - up to 419.2 billion soums, the liabilities - at 71.7 percent, to 721.1 billion soums, the equity - 1,6 times, up to 156.7 billion soums given the share capital amounting to 100 billion soums.

UZPROMSTROYBANK is the third largest bank with major financial indicators of the banking system of Uzbekistan. It received long-term and short-term credit ratings at "B", forecast - "stable" from the agency S & P in August 2009.

The bank increased its assets by 11.8 percent in 2009 up to 1,588 trillion soums compared to 2008, credit portfolio - by 19.1 percent, up to 1.256 trillion soums, equity capital - at 13.6 percent, up to 172.5 billion soums.

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