Presented by: Qobiljon Yunusov, Senior Lecturer, wiut vote of confidence in creditworthiness of Uzbek gov’t

Major challenges in the Uzbek banking sector

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Too many state-owned banks in Uzbekistan?
5
13
6
6
Types of commercial banks in Uzbekistan
State-owned
Joint-stock (partly state-owned)
Banks with foreign capital
Privately-owned banks
Commercial banks in Kazakhstan
State-owned
Banks with foreign capital
Joint stock or private banks

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Too much concentration of assets in state-owned banks
48.8%
33.2%
7.7%
10.3%
Uzbekistan's banking system ownership concentration 
(by assets, 2018)
State-owned banks
Joint Stock banks with large state ownership
Banks with foreign ownership
Others

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Too much concentration of assets in state-owned banks

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What happens if the music stops for state-owned banks?
According to the President’s administration over $3.3 billion have been channeled to capitalise or
recapitalize the banking sector (mostly state-owned banks) in recent years. The funds came from
the government budget. This is expected to gradually reduce or stop.
The challenge:
•
Cutbacks on government funding of banks could create funding gaps
if the banking system
does not manage to tap alternative and more diversified funding sources over the medium
term.
The opportunity:
•
Banks should aim at attracting funds from a variety of market sources including external IFI-
intermediated funds or direct funding from private sources. Relatively high & sustained
economic growth and the room for more growth, may help attract investors. Significant efforts
should be directed toward tapping direct market funding (e.g. via corporate bond issuance) and
developing risk transformation instruments such as swaps and other FX instruments to address
‘dollarization’ exposure of the banking sector in the longer term.

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