Uzbekistan’s Financial Sector Is Paving the Way for a Stable Yet Disruptive and Promising Future.

Robust growth, resilient banks, deeper liquidity, accelerating fintech.

Key Takeaways

• Growth remains robust (GDP up 8.7% y/y in Jan-Mar 2026) with a modest shift toward industry (29.2%) and construction (6.2%), while services eased slightly and agriculture ticked down. We reaffirm Uzbekistan as a promising, youthful market with strong ratings support and active DCM/ECM pipelines.
• Banking metrics are favourable: CAR 17.4% and CET1 14.6%; D-SIBs’ LCR 172% and HQLA at 18% of assets; FSI below mean +1 SD; ∆CoVaR stable. NPLs moderating with lower-loss buckets; profitability resilient with ROE ~10.8% and stronger NNII normalising ROA.
• Liquidity and competition are improving: deposits outpace loans (LDR down to 162%); NSFR near the lower bound; HQLA rising. Concentration continues to fall (HHI loans 898; deposits 626). Fintech momentum builds – Tezbank with Hamkorbank – wallets, BNPL, SNPL and microfinance gaining alongside traditional bank dominance.
• FX fundamentals look sound. GET analysis indicates the som is broadly aligned with fundamentals (ES overvaluation narrowing to ~10%; BoP at equilibrium), reducing sharp adjustment risk and supporting sustainable external financing. Estimates remain sensitive to assumptions, time spans and trade shifts, warranting continued monitoring.
• Net-net, we stay constructive. We will continue to write about digital disruptors and fintech, exploring this trend further in future notes. We see value clusters in traditional banks, neobanks, fintech

Economic Growth Between January-March 2026

• In August 2025 we spoke briefly about the strengths of the Uzbek economy. With strong ratings backing and continued opportunities in DCMs and ECMs, we reaffirm our position that Uzbekistan stands as one of the most promising countries in the region for investors looking to gain exposure to a young, growing and vibrant economy (with one of the best cuisines known to man – a few of our Cordobans visited last November).
• On 27 April 2026, the National Statistics Committee of the Republic of Uzbekistan published preliminary data indicating that GDP amounted to 447.9 trillion som and compared with the corresponding period of 2025, increased in real terms by 8.7%.
• The driver of this growth was mainly positive dynamics in key sectors. Minor changes were observed in the sectoral structure of GDP – the share of industry rose from 27.8% to 29.2%, construction from 6.1% to 6.2%, while the share of the service sector decreased from 57.6% to 56.2%, and agriculture, forestry and fisheries from 8.5% to 8.4%.

Banking as a Means of Encouraging Growth?

• In H1 2025, the financial stability of Uzbekistan’s banking system remained favourable, with bank liquidity improving significantly. In addition, the CAR stood at 17.4%, above minimum requirements.
• Financial stress in the banking system remained low – the Financial Stress Index (FSI), influenced by volatility in the FX market, unchanged conditions in the money market, and positive developments in the banking sector, stayed below its mean plus one standard deviation in H1 2025.

Financial Risk Is Stable

• The risk associated with contagion of financial stress in the banking system remained in line with its historical average. In H1 2025, due to improvements in bank liquidity, no sharp fluctuations were observed in ∆CoVaR. In most banks, the risk of financial stress contagion showed a stable trend.

Capital Ratios Look Good

• The interquartile range of the banking system’s CAR is narrowing. By end-H1 2025, the CET1 ratio of the banking system was 14.6%, which exceeds the minimum requirement. In addition, the CAR and CET1 ratios of D‑SIBs were 16.3% and 14.1%, respectively, remaining unchanged compared with the same period in 2024.

Asset Quality Is Improving, Supporting Growth in Profitability

• NPLs are growing at a slower rate relative to outstanding loans, and the share of NPLs in the loan portfolios of Uzbek banks is close to the median in certain CCA countries.
• The NPL composition is noteworthy: by end-H1 2025, 40% of NPLs were classified as “non‑satisfactory”, while 35% were “doubtful” loans. Within NPLs, “non‑satisfactory” loans are considered to have a relatively higher level of repayment reliability.
• RWA density in Uzbekistan was 94% as of 1 July 2025. A 2.9 pp reduction versus 2024 contributed positively to the CET1 ratio by 0.4 pp. Meanwhile, RORWA amounted to 2%.
• In H1 2025, NPAT reached 6.5 trillion som, up 18% y/y – ROE is at 10.8%. ROA is normalising with NNII at 21.1 trillion som (+37% y/y) and NII at 18.1 trillion som (+13% y/y), despite higher operating expenses and expected losses.

Liquidity Is Building Nicely as Stated at the EBRD Conference in 2023 Hosted in Samarkand

• Since then, bank liquidity is developing positively – the LCR for D‑SIBs reached 172%, with annual growth of 28%, standing below the banking system median. The NSFR for both the banking system and D‑SIBs remained close to the lower bound of the IQR.
• The share of HQLA in total assets is on the rise. The HQLA to total assets ratio is at 18%, increasing by 4 pp compared with the same period in 2024.

Competition Is Breaking Up and Opportunities Are Seeping Through

• With deposit growth faster than lending – at the end of H1 2025, the loan‑to‑deposit ratio declined to 162%, contracting by 24% compared with the corresponding period in 2024. Deposits outpaced the growth of loans by 18%.
• Concentration is easing – HHI decreased to 898 for bank loans and to 626 for deposits; for outstanding loans to legal entities, HHI stood at 1,222, falling by 72 units versus 1 July 2024.
• A plethora of fintech startups is emerging, with Fintech Farm launching Tezbank with Hamkorbank. Digital wallets, BNPL (e.g., ZoodPay), SNPL and microfinance are gaining, even as traditional banks still dominate.

Some Risks to Consider

• The German Economic Team (GET) concluded that the Uzbek som is close to the equilibrium exchange rate -largely in line with fundamentals, with past overvaluation narrowing to around 10% and BoP at equilibrium. Estimates are assumption‑sensitive and require monitoring.
• Political fluidity and governance risks persist – administrative inefficiencies, corruption concerns and uneven oversight can impair delivery. Social media and independent outlets continue to surface abuses; the Uzbekistan‑2030 strategy sets ambitious domestic and foreign‑policy priorities.

The Cordoba View

• We reaffirm our view that Uzbekistan’s financial sector is paving the way to a stable (but disruptive) and promising future. The macro set‑up remains compelling, while liquidity, capital, competition and fintech adoption are supportive. For now, we’ll keep eating plov and only hope there’s some left by the time all this becomes mainstream.

To read the full note, visit the Research Library.