Tashkent, Uzbekistan (UzDaily.com) -- IMRI experts analyzed the level of competition in the banking system of Uzbekistan for the first quarter of 2024. For the analysis, the Herfindahl-Hirschman Index (HHI), which is widely used to assess the level of competition in global economic practice, was used.

Monitoring the dynamics of changes in the HHI index allows us to assess the level of market monopolization and develop measures aimed at improving competition conditions.

Assets. In the first quarter of 2024, the HHI index, calculated by assets, improved by 25 points and amounted to 867 points. As of 1 April 2024, the total assets of commercial banks reached 665.6 trillion soums, or increased by 13.5 trillion soums according to compared to the beginning of the year and by 101 trillion soums compared to April 1, 2023.

The share of state banks in total assets amounted to 67%, decreasing by 1 percentage point. In particular, the share of Asaka Bank decreased by 0.6 percentage points. (from 8.90% to 8.27%), “National Bank” - by 0.5 percentage points. (from 19.55% to 19.01%), Microcredit Bank - by 0.1 percentage points. (from 2.92% to 2.84%).

Loans. The HHI index, calculated on credit deposits, amounted to 973 units. on April 1, 2024, improving by 69 units. compared to the same period last year (1042 units). The share of loans issued by banks with state participation in the total volume of loans in the banking system decreased by 1 percentage point.

In the 1st quarter of 2024, the total balance of loans from commercial banks increased by 1.5% and amounted to 478 trillion soums. In particular, loans to individuals increased by 40% compared to the 1st quarter of last year. The volume of education loans increased by 97%, consumer loans by 66%, microloans by 64% and mortgage loans by 24%.

In March 2024, the weighted average interest rates on loans in national currency decreased by 0.4 percentage points. compared to December 2023, amounting to 23.6%. This, in turn, indicates stabilization of the inflation rate combined with strong competition in the banking market.

Deposits. As of 1 April 2024, the total volume of deposits amounted to 243 trillion soums, which is almost 30 trillion soums more than in the same period last year. In the period under review, the HHI index, calculated on deposits, increased from 720 units. up to 674 units

The share of deposits attracted by banks with private and foreign capital in the total volume of attracted deposits amounted to 39% and 49% in the 1st and 4th quarters of last year, respectively, and by the 1st quarter of 2024 reached 50%.

In particular, the share of Kapital Bank increased by 0.6 percentage points. (from 12.45% to 13.08%), UzKDB Bank (from 2.6% to 3%) and Anor Bank (from 1.5% to 1.9%) increased by 0.4 percentage points.

As of 1 April 2024, the level of dollarization of deposits was 29.8%. Interest rates on time deposits in national currency in the 1st quarter of 2024 increased by 0.2 percentage points. compared to December 2023 and amounted to 19.9%. Rising interest rates indicate that banks are seeking to offer more attractive conditions for depositors, competing with each other to attract additional funds.