BAKU, Azerbaijan, Apr. 29
By Ilkin Seyfaddini – Trend:
Standard and Poors’ (S&P) Global Ratings has published new analytical review titled "Ratings of Banks in Uzbekistan",Trend reports citing the agency report.
As S&P noted, the significant capital reserves of state-owned banks, as well as banks with foreign participation in Uzbekistan, will help to mitigate the impact of increased economic risks due to the expected recession in the economies of Uzbekistan's trading partners and the impact of the COVID-19 pandemic.
"In this regard, we believe that these factors will not have a direct impact on the creditworthiness of state-owned Uzbek banks and branches of foreign banks rated by S&P Global Ratings," the agency noted.
"While we revised our outlooks on several domestic privately owned banks, our opinion on creditworthiness characteristics of National Bank for Foreign Economic Affairs of Uzbekistan (BB-/Stable/B), Uzpromstroybank (BB-/Stable/B), Ipoteka Bank (BB-/Stable/B) and Turon Bank (B/Stable/B) is unchanged. Likewise, we have not changed our assessment of the credit profile of KDB Bank Uzbekistan JSC (BB-/Stable/B)," the agency said.
The Agency expects that lower economic growth rates and deteriorating external conditions will put pressure on the profitability and asset quality of Uzbek banks.
In particular, S&P Global Ratings predicts that the volume of problem assets of the Uzbek banking sector will increase from 1.6 percent in 2019 to 4-5 percent in 2020, and losses on new loans will increase from 3 to 4 percent of the loan portfolio. Nevertheless, the agency believes that the creditworthiness characteristics of the largest state-owned banks in Uzbekistan with credit ratings will remain stable.
S&P Global Ratings has also published revised outlooks on the ratings of several private Uzbek banks: Hamkorbank from Positive to Stable (from B+/Positive/B to B+/Stable/B), Orient Finance from Positive to Stable (from B/Positive/B to B/Stable/B), Davr-Bank from Positive to Stable (from B-/Positive/B to B-/Stable/B), Ravnaq-bank from Stable to Negative (from B-/Stable/B to B-/Negative/B), Turkiston bank from Stable to Negative (from B-/Stable/B to B-/Negative/B).
The agency also confirmed the ratings and Stable outlook of JSCB Kapitalbank (B-/Stable/B).
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