Uzbek Banks See Credit Growth Amid Rising Problem Loans in Q1 2026
Uzbek banks' credit portfolios expanded significantly in Q1 2026, with a notable increase in problem loans driven mainly by state-owned banks.
In the first quarter of 2026, Uzbekistan's banking sector witnessed a substantial increase in total credit volume, accompanied by a rise in non-performing loans (NPLs). The Central Bank reported that the overall credit portfolio grew by 19.3 trillion Uzbek soms, reaching more than 623.3 trillion soms.
However, problem loans also increased by 1.8 trillion soms to nearly 19.9 trillion soms during the same period. This growth was primarily driven by state-owned banks, which experienced the largest credit portfolio expansions.
Sector Breakdown and Market Movements
The portfolios of state banks expanded by 11.1 trillion soms, with the most significant contributions from Agrobank (+5.44 trillion soms), National Bank (+2.63 trillion soms), People's Bank (+1.95 trillion soms), and Aloqabank (+1.89 trillion soms).
On the other hand, some banks saw reductions in their credit portfolios, including SQB and Asakabank, indicating a mixed performance across the sector.
Among non-state banks, Hamkorbank, Hayot Bank, and Kapitalbank showed active credit growth, while TBC Bank and Orient Finans Bank experienced declines in lending.
"Despite the increase in problem loans, their share relative to the total credit portfolio decreased from 3.19% to 2.99%, due to rapid overall credit growth," noted the Central Bank report.
Problem loans rose predominantly in state banks by 1.46 trillion soms, with the largest increases attributed to SQB, Aloqabank, and Asakabank. Conversely, some banks such as Ipoteka Bank saw a reduction in problematic credits by 316 billion soms, while Anor Bank and Garant Bank reported increases in NPLs.
The concurrent rise in total credit volume and problem loans reflects ongoing sector dynamics, highlighting areas of growth alongside emerging risks that investors and equity researchers should monitor closely.
From a market perspective, this trend may influence sector rotation among financial stocks on Wall Street, particularly investors focusing on emerging markets banking sectors. Increased problem loans in state banks might raise concerns about asset quality, potentially affecting trading volumes and valuations of related financial equities.
Equity analysts will likely weigh these credit portfolio changes against broader macroeconomic signals, adjusting sector outlooks for Uzbek financial institutions accordingly.
