Various Rating Actions Taken On Uzbek Banks Amid Market Volatility And The COVID-19 Pandemic

Overview Recession in the economies of major trading partners and the COVID-19 outbreak will effect Uzbekistan's economic growth and imbalances in the next 12-18 months. We expect growing economic risks will increase challenges for Uzbek domestic banks, especially for smaller players, which could constrain their business growth, earnings prospects, and funding sustainability. We believe that these together could ultimately lead to a spike in credit losses to about 3%-4% in 2020 from 1.6% in 2019 and nonperforming loans (NPLs) to 4%-5% in 2020 from 1.6% in 2019. We now consider the economic risk trend for Uzbekistan's banking system as negative instead of stable. We are affirming all ratings, but revising our outlooks on some of the Uzbekistan-based banks we rate.

...- Overview Recession in the economies of major trading partners and the COVID-19 outbreak will effect Uzbekistan's economic growth and imbalances in the next 12-18 months. - We expect growing economic risks will increase challenges for Uzbek domestic banks, especially for smaller players, which could constrain their business growth, earnings prospects, and funding sustainability. - We believe that these together could ultimately lead to a spike in credit losses to about 3%-4% in 2020 from 1.6% in 2019 and nonperforming loans (NPLs) to 4%-5% in 2020 from 1.6% in 2019. - We now consider the economic risk trend for Uzbekistan's banking system as negative instead of stable. - We are affirming all ratings, but revising our outlooks on some of the Uzbekistan-based banks we rate. MOSCOW (S&P Global Ratings) April 27, 2020--S&P Global Ratings today took the following actions on the Uzbekistan-based banks it rates:...

Ratings Action