Tashkent, Uzbekistan (UzDaily.com) -- Standard & Poor's Ratings Services affirmed its 'B' long-term and 'B' short-term counterparty credit ratings on National Bank For Foreign Economic Activity Of The Republic Of Uzbekistan (NBU), Halk Bank (Halk), and Uzpromstroybank. The outlooks on all three banks remain stable.

"The affirmations reflect our view that strong ongoing government support has somewhat sheltered the financial performance of NBU, Halk Bank, and Uzpromstroybank during the global economic slowdown, and has helped them maintain adequate capitalization and balance-sheet liquidity," said Standard & Poor's credit analyst Sergey Voronenko.

Because of its direct, visible control of the banks, Standard & Poor's believes the Uzbek government would provide timely and sufficient support to the banks if necessary.

All three banks have significant domestic franchises and operate to a large degree as agents of government policy in serving particular sectors of the economy. “Taking into account these factors and due to our view of Uzbekistan's creditworthiness, we factor our support expectations into the ratings of the three banks without additional notches above their stand-alone credit profiles”, Standard & Poor's said.

In accordance with our criteria for GREs, Standard & Poor's assesses the likelihood of extraordinary government support to both NBU and Halk Bank as "extremely high", based on:

• The banks' "critical" role for the local economy as the largest lender to the strategic industries (NBU) and the largest savings bank (Halk); and
• Both banks' "very strong" link with the government via 100% state ownership.

Standard & Poor's assesses the likelihood of extraordinary state support in the event of financial distress to Uzpromstroybank as "very high", because of:

• The bank's "very important" role for Uzbekistan's economy as one of the largest lenders to key sectors; and
• Uzpromstroy's "very strong" link with the government because of its ownership by the Ministry of Finance (35%) and the Uzbekistan Fund for Reconstruction and Development (26%).
  The stable outlooks on NBU, Halk Bank, and Uzpromstroybank balance high credit risks with Standard & Poor's expectation of continued strong government support and ownership.

  Ratings upside potential for the banks is limited, but their stand-alone credit profiles could benefit from diversification of the loan profile and funding structure, while maintaining acceptable asset quality metrics and adequate capitalization and liquidity.