BAKU, Azerbaijan, June 19. Fitch Ratings has revised the outlooks on seven major state-owned banks in Uzbekistan to Positive from Stable, citing an improved capacity of the government to support the country's banking sector, while affirming their existing credit ratings, Trend reports via Fitch Ratings.
The rating agency affirmed the Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) of six banks — the National Bank for Foreign Economic Activity of Uzbekistan (NBU), Agrobank, Xalq Bank, Business Development Bank (BDB), Aloqabank, and Microcreditbank (MCB) — at 'BB'. Turonbank's long-term ratings were affirmed at 'BB-'.
Fitch said the outlook revision follows its June 3 decision to revise Uzbekistan’s sovereign outlook to Positive while affirming the country’s sovereign rating at 'BB'.
"The revision reflects Fitch’s view of an improved ability of the Uzbek authorities to provide support to domestic state-owned banks," the agency said.
According to Fitch, the ratings of most of the banks are closely linked to Uzbekistan’s sovereign credit profile due to majority state ownership, a strong history of government capital and funding support, and their strategic roles in financing key sectors of the economy and government-backed social programs.
NBU and Agrobank remain among the country’s most strategically important lenders, while Xalq Bank, Business Development Bank, Aloqabank, and Microcreditbank play significant roles in implementing social and development initiatives. Fitch also highlighted NBU’s systemic importance to the national banking system.
Turonbank’s rating remains one notch below the sovereign rating because of its relatively small size, limited systemic importance, and lack of a clearly defined policy role.
The agency noted that government plans to privatize Aloqabank and Turonbank by 2030 have not altered its support assumptions. Fitch does not expect major state-bank privatizations to occur before 2027 and said the transformation required to prepare the banks for sale could take several years.
In Aloqabank’s case, Fitch suggested privatization may become even less likely after the bank assumed a new policy role in 2025.
"We believe the bank’s privatization plans could ultimately be canceled," Fitch said regarding Aloqabank.
Fitch also affirmed the banks’ short-term issuer default ratings at 'B', while maintaining ratings on senior unsecured debt issued by NBU, Agrobank, and Aloqabank in line with their long-term issuer ratings.
Looking ahead, Fitch said the banks’ ratings could be upgraded if Uzbekistan’s sovereign rating is raised and government support remains strong. Conversely, any downgrade of the sovereign rating or weakening of state support could result in negative rating actions for the banks.
The agency also pointed to governance-related risks across the state-owned banking sector, noting significant government involvement in board oversight, business operations, and strategic decision-making. These governance factors continue to weigh on the banks’ credit profiles.
Despite those concerns, Fitch’s latest action signals growing confidence in Uzbekistan’s economic outlook and the government’s ability to back its strategically important financial institutions as the country continues its broader economic reform agenda.
