The uzA rating reflects high level of solvency of People’s Bank. The bank has high ability to execute its financial liabilities in time and fully compared to other banks with lower ratings. But, the solvency of the bank is more sensitive to negative changes in commercial, financial and economic conditions compared to other banks with higher ratings.

People’s Bank is one of leading state commercial banks of Uzbekistan and it improved its business scale in recent years. In the fourth quarter of 2011, the bank’s assets increased by 35.17% year-on-year to 1.617 trillion soums. The loan portfolio rose by 36.16% to 755.8 billion soums, including reserves on possible losses on loans and leasing. The rating agency said that the concentration of the loan portfolio of the bank is still in high level. Some 26.6% (32.4% in 4Q 2010) of loans of the bank were issued to agriculture sector, 17.5% (16.1% in 4Q 2010) to construction and 28.6% (28.9%) to other sectors.

The quality of loan portfolio of the People’s Bank is considered as at acceptable level. It is worth to mention that the problem loans of the bank made up 17.2 billion soums in the fourth quarter of 2011, or rose by 50 times year-on-year and their share in loan portfolio made up 2.28%. The bad loans rose by 46.3 times and made up 2.11% f loan portfolio. Created reserves on possible losses on loans and leasing made up 1.64% of loan portfolio, which, according to Ahbor-Reyting, is not enough to cover bad and unsecured loans. The agency said that 97.9% of loans are rated as good, 0.03% - suspicious and 2.07% - bad loans.

The liquidity level of the People’s Bank is rated as acceptable. In the fourth quarter of 2011, the liquid assets of the bank rose by 24.43% to 260.6 billion soums in the reporting period, while their share made up 16.11% in total assets (17.51% in 4Q 2010). At the same time, the current assets and current liabilities of the bank grew by 24.48% and 28.97% respectively in the fourth quarter of 2011. At the same time, the coefficient of current liquidity of the bank made up 75.24% (77.95% in 4Q 2010).

Main part of borrowed funds of the People’s Bank fell to share of accounts of its clients. In the fourth quarter of 2011, the clientele accounts made up 80.72% of all attracted borrowed resources (84.99% in 4Q 2010). At the same time, share of deposits on accumulated pension made up 39.11% of total liabilities, and Ahbor-Reyting considers this as stable and quality, as well as cheap source of funding.

It is worth to mention that People’s Bank is only authorized bank in Uzbekistan, which have right to accumulate and manage resources of accumulated pension deposits. Next significant source of borrowing is resources of other banks, which account 11.44% of total liabilities. Ahbor-Reyting said that the bank has high opportunities in funding as it has state support and potential of growth of funds inflow from accumulated pension system.

In the reporting period, the profitability of the People’s Bank strengthened. Interest income of the bank rose by 38.5% and interest expenses – by 52.31%. This resulted in decrease of interest margin and interest spread, which made up 7.79% and 8.05% (8.46% and 8.69% in 4Q 2010) respectively in the reporting period. Profitability of loan portfolio is in stable level and made up 11.75% in the fourth quarter of 2011.

Total operation income of the bank increased by 34.76%, while expenses rose by 35.57%. At the same time, the ratio of expenses to operational income grew from 72.38% in the fourth quarter of 2010 to 72.91% in the same period of 2011. In the result, the net income grew by 32.18% to 37.4 billion soums. At the same time, the profitability of assets decreased from 2.73% in the fourth quarter of 2010 to 2.66% in the same period of 2011. Profitability of own capital increased from 15.88% in the fourth quarter of 2010 to 17.24% in the same period of 2011. Ahbor-Reyting considers that in short-term period, profitability of the bank will continue to grow and will be in favourable level.

Taking into account absolute state support, the capitalization of People’s Bank is rated as high. The capitalization of the bank strengthened in recent years due to state support of the bank. Total capital of the bank rose by 17.48% in the fourth quarter of 2011, and made up 234.2 billion soums (199.4 billion soums in 4Q 2010). Equity capital rose by 12.5% to 180 billion soums in the reporting period.

The coefficient of the general capital and the first level capital adequacy made u 16.5% and 13.2% respectively in the fourth quarter of 2011 (17.1% and 15.5% in 4Q 2010). At the same time, own capital adequacy decreased from 16.66% in the fourth quarter of 2010 to 14.48% in the same period of 2011.