Central Bank Stress Test Outlines Risk Scenario Capital Impact

Tashkent, Uzbekistan (UzDaily.uz) — The Common Equity Tier 1 capital adequacy ratio of the banking system of Uzbekistan could decline to 5.6% by the end of 2028 under a risk scenario, while the total regulatory capital adequacy ratio could fall to 6.8%. These solvency macro-stress test results were published by the Central Bank in its financial stability review for 2025.

The regulator emphasized that this represents an unlikely but potentially severe tail risk scenario, and the effect of shocks on bank capital manifests with a time lag. Under the baseline scenario, which is built on the current macroeconomic situation, no such decline is expected.

The risk scenario assumes a tightening of global financial conditions amid geopolitical tensions, supply chain disruptions, rising commodity prices, and higher production costs. According to the Growth-at-Risk model, the real GDP of Uzbekistan could contract by 0.7% by the end of 2026 under these conditions.

At the same time, the liquidity stress test produced more reassuring results, showing that net cash inflow across the banking system remains positive even in the risk scenario. The mismatch between the maturities of assets and liabilities decreased during the year, and banks with the largest potential liquidity issues possess sufficient assets to cover expected outflows, the review stated.

The Central Bank assessed the scale of contagion risk—the spread of problems from one bank to the system through mutual obligations—as low. The regulator also considers the impact of a potential drop in housing prices on mortgage loan losses to be very limited.

The Central Bank estimated the safety cushion of the system at the beginning of 2026 to be sufficient. All banks meet the Basel III capital requirements including buffers, and the total regulatory capital adequacy ratio exceeds 13%. This is against minimum requirements that include a capital conservation buffer of 2.5%, a countercyclical buffer of 1.5%, and an additional requirement of 1% for systemically important banks.