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Wednesday, November 22, 2017

Moody's: Uzbekistan banking system outlook remains stable

The Central Bank of Uzbekistan recently held its annual conference with Moody's to discuss international ratings of commercial banks, the introduction of international standards of analysis and the evaluation of bank activities.

The event was organized in the framework of the presidential resolution "On priorities for further reform and improve the stability of the financial and banking system in 2011-2015 and achieving high international ratings."

The participants, including senior officials and managers of commercial banks, discussed issues related to the analysis of the financial statements of banks and the methodology of Moody's ratings, as well as the possibility of introducing a modern system of assessment of commercial banks activities based on international norms and standards.

Moody's presented a detailed explanation of the methodology used in assigning credit ratings as well as its opinion on the effectiveness of reforms in the Uzbek banking sector.

Moody's noted that it is currently working with six CIS countries - Uzbekistan, Russia, Ukraine, Belarus, Azerbaijan and Kazakhstan - of which only two countries, including Uzbekistan, have a "stable" outlook.

The main factor determining its outlook is sustained economic growth and favorable conditions for banks during the forecast period of 12-18 months.

In addition, key positive factors, according to Moody's, are stable world prices for major export commodities of Uzbekistan, significant capital investments by both public and private sectors, quality of assets and capitalization, stable liquidity figures, capital growth through internal resources, good profitability, and the government's ability to systemically support commercial banks.

In recent years, considerable work has been accomplished in the country to improve the stability of the financial and banking system. As a result, currently, all commercial banks have ratings from Moody's, Standard & Poor's, and Fitch Ratings, confirming the stability and steady growth of Uzbek banks.