Tashkent, Uzbekistan (UzDaily.com) — As of the end of August 2024, the credit portfolio of commercial banks in Uzbekistan reached 509.7 trillion soums (approximately 19.5 trillion tenge), marking an increase of 14.6% compared to the previous year.

Out of this, the volume of problem loans amounted to 822.5 billion tenge (subsequent data will be converted into tenge), reflecting a rise of 24.7% from August of the previous year. The share of non-performing loans (NPL) in the loan portfolio of banks in Uzbekistan increased from 3.9% to 4.2% over the year.

For comparison, the credit portfolio of second-tier banks in Kazakhstan reached 33 trillion tenge, which indicates a 23% increase year-on-year. The banking sector in Kazakhstan comprises 21 banks, while Uzbekistan has 36 banks.

In Uzbekistan’s banking portfolio, loans issued to legal entities dominate, accounting for 67.3% compared to 32.7% issued to individuals, or 13.1 trillion tenge versus 6.4 trillion tenge. It is noteworthy that the share of loans to individuals has been growing: a year ago, it was 30.2%, and in August 2020, it was only 19.6%. In Kazakhstan, the distribution is different, with 58% of loans going to individuals and 42% to legal entities.

All subsequent figures have been recalculated according to the official exchange rate of the National Bank of Kazakhstan as of 1 September 2024.

State-owned banks lead the credit market in Uzbekistan. As of the end of August 2024, the total volume of loans from these banks was 13.6 trillion tenge, representing a 10.7% increase over the year. There are 10 such banks, with Uznatsbank showing the largest credit portfolio at nearly 4 trillion tenge. It is followed by Uzpromstroybank and Agrobank, with loan volumes of 2.4 trillion tenge and 2.3 trillion tenge, respectively.

The remaining banks have a combined credit portfolio amounting to 5.9 trillion tenge. Among them, the largest volumes are observed at Ipoteka Bank (1.4 trillion tenge), Kapitalbank (1.1 trillion tenge), and Hamkorbank (701.6 billion tenge).

It is important to note that concentration in Uzbekistan’s credit market is lower than in Kazakhstan. The two largest banks in Uzbekistan together account for less than one-third of the total credit portfolio of commercial banks in the country, while in Kazakhstan, the two largest banks consolidate almost half of the loan portfolio of second-tier banks.

As previously mentioned, banks in Uzbekistan primarily lend to businesses. By the end of August 2024, 25 out of 36 banks had a credit portfolio dominated by loans issued to legal entities. In terms of lending types, loans to non-financial legal entities amounted to 12.4 trillion tenge, while microloans to legal entities totaled 400 billion tenge. Syndicated loans accounted for 187.7 billion tenge, leasing and factoring for 91.1 billion tenge, and interbank loans for 25.1 billion tenge.

Among loans issued to individuals, 2.4 trillion tenge was allocated for mortgage loans, 1.6 trillion tenge for consumer loans, and 1.4 trillion tenge for microloans. The volume of loans for business development was 703 billion tenge, while education loans amounted to 194.1 billion tenge.

In terms of economic sectors, the largest volume of loans was issued to industry, totaling 5.6 trillion tenge. Agriculture followed with 2 trillion tenge. Loans for trade and public services accounted for 1.4 trillion tenge, while the transport and communications sector received 1.3 trillion tenge. Loans issued in the construction sector represented less than 3% of the total credit portfolio, amounting to 493 billion tenge.