The privatization of state banks in Uzbekistan may face delays, as reported by "Kursiv" citing Fitch Ratings deputy director Pavel Kaptel. The government plans to reform the banking system, including selling several state-owned banks with the assistance of international development institutions like the European Bank for Reconstruction and Development, the International Finance Corporation, and the Asian Development Bank.
Kaptel emphasized the importance of improving corporate governance procedures, risk management in banks, and regulatory standards in the banking sector. Notably, the share of private banks in the sector has doubled in the past four years, reaching about one-third of the sector's assets, but still falls short of the government's target of 60% by the end of 2025.
Despite plans to sell three major banks, only "Ipoteka-Bank" has been sold so far. The sale of Uzpromstroybank (SQB) and Asakabank has been delayed, with potential extensions likely. Fitch stressed the need for these banks to demonstrate greater profitability through increased lending, particularly in the retail segment, which requires additional capital.
The involvement of institutions like the EBRD and IFC as anchor investors could provide the necessary capital for banks to expand lending, improve profitability, and increase market share. However, geopolitical uncertainties in the post-Soviet region could also impact investor sentiment and potentially further delay privatization efforts.
In August 2023, the president postponed the privatization and IPO of shares in Kishlok Kurilish Bank, Asakabank, Alokabank, Agrobank, and others to a later date. The government aims to reduce its stake in Uzpromstroybank to below 50% by the end of 2024, deviating from the initial plan to auction off the entire government stake.
