Tashkent, Uzbekistan (UzDaily.com) -- The Center for Economic Research and Reforms (CERR) calculated the "Bank Activity Index" for the 1Q of 2023, on the basis of which the rating of banks was updated. 

The Index was calculated for 29 commercial banks of the country, taking into account their division into two groups: large (17) and small (12) banks.

When calculating the Index, 21 indicators were evaluated in 7 areas: financial intermediation, financial accessibility, capital adequacy, asset quality, management efficiency, profitability and liquidity.

The study is conducted quarterly in order to monitor changes in the share of the private sector in banking assets, as well as to assess the effectiveness of reforms and transformation processes in the country’s banking sector.

Key performance indicators of banks

As of March 1, 2023, the assets of the banking system of the republic amounted to 561.8 trillion sums, having increased by 28.6% compared to the same period last year, liabilities — 480 trillion sums (growth of 31.6%), the balance on loans — 398 trillion sums (21.5%), deposits — 211 trillion sums (42%).

78% of the assets of the banking system, 82.5% of the loan portfolio, as well as 62.1% of deposits are accounted for by 11 banks with a state share, the rest by private banks. At the same time, the ratio of loans to deposits in state-owned banks was 251%, in other banks it was 87%.

The level of profitability of banks also showed an increase. Interest income increased by 26.3%, interest-free income increased by almost 60%, net profit by 53.4%.

The activity of individuals in using the banking system has increased. If 26.5% of the loan portfolio (for the corresponding period of 2022 – 21.7%) fell to the share of individuals, and 73.5% (78.3%) to the share of legal entities, then the balance of deposits, respectively, 30% (25.3%) to the share of individuals and 70% (74.7%) to the share of legal entities.

The balance of non-performing loans has decreased. During the analyzed period, the share of problem loans (loans with a delay of more than 90 days, non-performing loans - NPL) in the total volume of loans issued averaged 3.8% and decreased by 1.5 percentage points compared to the corresponding period last year.

Analysis of appeals about the activities of banks

In the course of the study, the appeals of citizens received by the People’s Reception Offices during the 1Q of 2023 were studied. In particular, almost 8 thousand appeals were received on the issues of the banking sector.

The largest number of appeals, over 29% related to the activities of Xalq Bank, 15.1% of Agrobank, another 6.3% of Mikrokreditbank and 2.9% of Ipoteka Bank.

Rating of activity of large banks for the 1Q of 2023

In the rating of large banks, Kapital Bank retained its leadership, Asia Alliance Bank rose by 1 point and exchanged places with Hamkor Bank, which dropped to the 3rd line of the rating.

Trast Bank has been losing its position in the rating for the third quarter in a row. This bank again lost one point and took the 5th position and vacated its place to Ipak Yuli Bank. At the same time, if Ipoteka bank and National Bank rose by two positions, and Xalq bank, Orient Finance Bank and Asaka Bank by one, then Invest Finance Bank and Agrobank lost three positions at once, Turon Bank dropped by one the position, and the other banks retained their seats.

Of the large banks with a state share, only Agrobank and Turon Bank were downgraded in the rating and respectively took 14th and 17th places.

At the same time, if Agrobank lowered its indicators only on capital adequacy and liquidity, then Turon Bank’s indicators on profitability significantly decreased.

Of the large banks with a state share, Ipoteka bank rose by 2 positions and took 7th place. Despite the fact that in this quarter, the bank’s asset quality indicators decreased, and the indicators of capital adequacy, liquidity and management efficiency increased. However, the ratio of the amount of deposits and loans received from the Ministry of Finance to liabilities still remains at a high level.

Small banks activity rating for the 1Q of 2023

 In the rating of small banks, Davr Bank, Universal Bank and Ziraat Bank retained their leading positions, while TBC bank rose by 2 positions and took 4th place.

Although the indicators of capital adequacy in TBC bank have significantly decreased, the improvement in the indicators of return on capital, as well as management efficiency, have affected the bank’s place in the rating.

Tenge bank, Anor bank, Poytakht bank and Uzagroexport bank dropped by 1 position. At the same time, Madad Invest bank and Garant bank rose by 1 position.

Two more small banks have retained their positions compared to the past period — these are Ravnaq bank and UzKDB bank.

To get a full report, methodology and detailed information about the study, please contact the Center for Economic Research and Reforms.