The international rating agency Fitch Ratings stated that the new bank resolution regime in Uzbekistan is likely not to affect state banks, which are projected to maintain a moderate probability of receiving emergency support from the government. Consequently, their Government Support Ratings (GSRs) are expected to remain unchanged.
In Fitch's view, the new system strengthens the agency's position that senior creditors of private banks cannot rely on state assistance. The agency continues to factor in government support when determining the Issuer Default Ratings (IDRs) for all state banks in Uzbekistan, while private banks have a 'No Support' rating.
Under the new structure, domestically significant banks (D-SIBs) will undergo resolution procedures under the supervision of the Central Bank of Uzbekistan. Possible measures include transferring assets and liabilities to another bank, creating a 'bridge' bank, or converting/writing down certain liabilities through a 'bail-in' mechanism. Non-systemic banks will be liquidated in case of insolvency, unless they perform critically important functions.
The 'bail-in' mechanism will primarily apply to capital and subordinated debt. If these resources are insufficient to cover losses or restore capital adequacy, other liabilities, including senior debt, may also be affected, with customer deposits excluded from this process. The Central Bank may exempt certain liabilities from 'bail-in' if their inclusion threatens financial stability or violates critical functions of the bank.
Nevertheless, Fitch noted that the possibility of applying 'bail-in' to senior debt confirms that authorities are unlikely to support senior creditors of private banks, including systemically important creditors. Although the detailed provisions of the Central Bank's resolution are not yet approved, the new law provides for the possibility of state support for banks undergoing resolution.
According to Fitch, this indicates that the Central Bank and the government will provide sufficient support to troubled state banks regardless of their systemic importance and will not apply 'bail-in' to their senior creditors. The agency bases its assessment on the fact that the government owns the majority of these banks, their important role in implementing state policy, and the government's strong financial flexibility, as foreign reserves significantly exceed external borrowings.
Fitch estimates that external borrowings accounted for about 40% of the total liabilities of state banks by the end of 2025. Applying 'bail-in' to senior debt would likely undermine access to external financing and increase borrowing costs for other state enterprises.
The government support rating for each bank depends on its ownership structure, its role in implementing government economic and social policies, as well as its history of receiving state capital and funding. The long-term IDRs of National Bank of Uzbekistan, Agrobank, People's Bank, Business Development Bank, Aloqabank, and Microcreditbank correspond to Uzbekistan's sovereign rating of 'BB' with a positive outlook. Their government support ratings are set at 'bb'.
Fitch explains these ratings based on the strategic nature of state ownership and the banks' role in lending to priority sectors and supporting social programs. For the National Bank of Uzbekistan, the agency also considers its high systemic importance. The National Bank of Uzbekistan, Agrobank, and People's Bank are classified as systemically important banks.
Aloqabank formally remains on the privatization list. However, Fitch believes that the probability of its sale has decreased after expanding the bank's role in implementing state programs in 2025. Over the past five years, the government and related structures have invested $2.4 billion in these banks in the form of capital contributions. These funds were used to support programs implemented by the banks on behalf of the government and to maintain capital adequacy. The National Bank of Uzbekistan did not require recapitalization.
According to Fitch's schedule, the banks received approximately $420–$430 million in both 2021 and 2022. Capital contributions decreased to about $280 million in 2023 before increasing annually to about $620–$630 million in 2024 and 2025. These figures include both Tier 1 and Tier 2 capital.
Uzpromstroybank, Asaka Bank, and Turon Bank received significantly smaller amounts: about $60 million in 2021, approximately $140 million and $120 million in 2022 and 2023, respectively, about $40 million in 2024, and about $10 million in 2025. Uzpromstroybank and Asaka Bank have been preparing for privatization since 2020. Uzpromstroybank and Asaka Bank have 'BB' ratings with a Stable Outlook and 'bb' government support ratings. Both banks are systemically important. Fitch notes that their Stable Outlook reflects the non-strategic nature of state ownership and the more modest level of support they have received in recent years.
The arrival of foreign investors has improved their medium-term sales prospects, but Fitch does not expect any of these banks to be privatized before 2027. Fitch forecasts that the government will provide capital or financial support to these banks if needed before the sale to maintain their viability and adequate capital. Specifically, the government injected $95 million into Asaka Bank's capital before the planned acquisition of a minority stake by the European Bank for Reconstruction and Development.
Turon Bank's rating is one step below the sovereign rating, standing at 'BB-' with a Positive Outlook, and its government support rating is 'bb-'. Fitch attributes this to the bank's small size, lack of a clearly defined role in implementing state policy, and a lower level of capital support. A recent presidential decree confirmed plans to sell the bank to a strategic private investor by the end of 2028.
Private banks' ratings do not account for government support. Ipak Yuli Bank and Orient Finans Bank have 'B+' ratings with a Stable Outlook, Universal Bank has a 'B-' rating with a Stable Outlook, and Anor Bank has a 'CCC+' rating. For Ipoteka Bank, which has a 'BB' rating with a Positive Outlook, and TBC Bank, which has a 'BB-' rating with a Stable Outlook, government support ratings are not applicable, as both banks are owned by foreign shareholders, and Fitch considers potential support from their owners. Ipoteka Bank is also classified as systemically important.
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