Baku, Azerbaijan, Sept. 5
By Fakhri Vakilov -Trend:
The S&P Global Ratings agency notes a very high credit risk in the economy of Uzbekistan and insufficiently strict underwriting standards, which leads to very high growth rates in the country's banking sector, Trend reports with reference to S&P's new analytical review Bank Ratings of Uzbekistan.
“We assess the trend in the development of economic risks in Uzbekistan as stable, since we believe that the risk of 'credit bubbles' is quite limited, due to the low level of household debt and low exposure to risks associated with the real estate and construction sectors. The development trend of economic risks is stable,” the document says.
Most banks in Uzbekistan with S&P ratings have “Stable” rating forecasts. One “Positive” outlook and one placement of ratings on the CreditWatch list with positive expectations reflect factors specific to specific banks rather than the sector trends.
Of the 11 Uzbek banks with S&P ratings, only the National Bank for Foreign Economic Affairs of Uzbekistan (NBU) has a “strong” business position. This assessment reflects a more significant market share of the NBU in the country compared to other Uzbek banks, read the message.
Capitalization and profitability indicators, as a rule, have a positive or neutral impact on the rating level; however, S&P forecast a slight decrease in capitalization indicators in 2019-2020 due to continued business growth.
S&P Global Ratings expects that most Uzbek banks will continue to depend on external sources of capital to support lending growth.
Assessment of funding indicators is a neutral factor for most Uzbek banks with S&P ratings, with the exception of NBU (which dominates the market in the retail deposits segment) and KDB Bank Uzbekistan JSC (the status of a bank owned by foreign owners has a positive effect on its performance).
S&P Global Ratings classifies NBU, JSCB Uzpromstroybank, JSCIB Ipoteka Bank and JSCB Turonbank as state-related organizations.
In assessing the stand-alone credit profile (SACP) of state-owned banks, S&P takes into account current government support in the form of capital, guarantees and funding.
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