WAYS OF IMPROVING CREDIT PORTFOLIO QUALITY UNDER THE TRANSFORMATION OF BANKS: EVIDENCE FROM UZBEKISTAN
DOI:
https://doi.org/10.5281/Keywords:
bank transformation, credit portfolio, non-performing loans, IFRS 9, privatisation, directed lending, financial stability.Abstract
The paper examines the quality of the credit portfolio of Uzbek commercial banks under the ongoing transformation of the banking system. Drawing on the open monthly statistics of the Central Bank of Uzbekistan for 2025–2026, the study identifies two patterns that a single-indicator analysis conceals: the officially reported non-performing loan (NPL) ratio falls sharply at each year-end and rebounds within one or two quarters, and the burden of problem assets is concentrated in state-owned banks. The 2.5–3 fold divergence between the prudential NPL ratio (3.7 % as of 1 June 2026) and rating agency estimates under IFRS 9 (9–10 % expected in 2026) is interpreted as a recognition problem rather than an asset quality problem as such. An integral index of credit portfolio quality composed of six sub-indices is proposed, and five policy recommendations are formulated.
References
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