The agency has revised the banks' Support Rating Floors to 'No Floor' from 'B-'.

The revision of the Support Rating Floors reflects the fact that Fitch is presently unable to reliably assess the Uzbekistan sovereign's credit profile and hence its ability to support the state-controlled banks. Fitch does not maintain public ratings on Uzbekistan and, in the agency's view, the information available in the public domain is currently insufficient to form an opinion on the sovereign's creditworthiness. Therefore, the banks' IDRs are now solely dependent on their standalone credit profiles.

The banks' ratings reflect their weak profitability, moderate capitalisation (with the exception of MCB, which has strong capital ratios) and significant concentration of credit risks, either by name (Asaka Bank and UPSB) or by industry (UPSB, AB and MCB). The ratings also factor in the banks' weak corporate governance and the operating environment's relatively high risks.

The banks' reported asset quality is reasonable, although this is largely dependent on sovereign assistance to the still predominantly state-controlled economy. A potential deterioration in asset quality may also arise as a result of the pressure to meet targets for lending to small and medium-sized enterprises set for 2011. The banks' ratings are supported by their limited dependence on wholesale funding and the relative stability of deposits to date.

The banks' Long-term foreign currency IDRs and Viability Ratings (where assigned) are one notch lower than their Long-term local currency IDRs because, in the agency's view, the banks may not always be able to access foreign currency to service their FX obligations.

Fitch will endeavour to gain access to sufficient information in the next few months to be able to assess the Uzbek sovereign's ability to provide support to the banks. If such information is forthcoming, then the agency may revise upward the Support Rating Floors for the Uzbek state-controlled banks.

The rating actions are as follows:

Asaka Bank, AB and UPSB:
Long-term foreign currency IDR: affirmed at 'B-' with a Stable Outlook
Long-term local currency IDR: affirmed at 'B' with a Stable Outlook
Short-term foreign and local currency IDRs: affirmed at 'B'
Viability Rating: affirmed at 'b-'
Individual Rating: affirmed at 'D/E'
Support Rating: affirmed '5'
Support Rating Floor: revised to 'No Floor' from 'B-'

Microcreditbank

Long-term foreign currency IDR: affirmed at 'B-' with a Stable Outlook
Long-term local currency IDR: affirmed at 'B' with a Stable Outlook
Short-term foreign and local currency IDRs: affirmed at 'B'
Individual Rating: affirmed at 'D/E'
Support Rating: affirmed '5'
Support Rating Floor: revised to 'No Floor' from 'B-'