Fitch Affirms Asaka Bank’s ‘BB’ Rating with Stable Outlook

Tashkent, Uzbekistan (UzDaily.com) — On 13 March 2026, Fitch Ratings confirmed the long-term issuer default ratings (IDRs) of Asaka Bank in foreign and local currency at ‘BB’ with a stable outlook. The bank’s Viability Rating (VR) was maintained at ‘b’.

Fitch noted that the IDRs reflect a moderate likelihood of state support, as indicated by the bank’s Government Support Rating (GSR) of ‘bb’. This support is driven by state ownership, moderate systemic importance, and the relatively low cost of support given the country’s international reserves.

Asaka Bank is included in Uzbekistan’s banking reform strategy with a view toward eventual privatization, which Fitch estimates could occur around 2030. Until then, the agency continues to factor state support into its ratings.

Uzbekistan’s banking operational environment has strengthened in recent years, with Fitch expecting further reductions in structural risks and improvements in regulation and governance, supporting profitability and capitalization growth.

Asaka Bank ranks fourth in the country by total assets, representing 7% of the banking sector at the end of 2025. Its corporate loan portfolio is concentrated in the extractive and manufacturing sectors, while the bank is gradually shifting focus toward retail lending and the SME segment.

The credit portfolio grew moderately by 7% in 2025, though high borrower concentration and loan dollarization remain key risks. Fitch forecasts credit growth of around 10% in 2026–2027, primarily through retail and SME lending, which should reduce concentration risk.

Asset quality remains moderately weak, with non-performing loans at 8% at the end of 2025, covered 0.5x by reserves, and projected to rise to 10% by the end of 2026. Profitability remains low, with a net interest margin of 1.5% under local standards and ROAE of approximately 3%.

Capitalization is stable, with a Tier 1 ratio of 14.1% at the end of 2025; an additional capitalization of US$95 million is planned in H1 2026. Liquidity covers 13% of assets, supporting nearly half of non-governmental deposits.

Fitch emphasized that the rating is sensitive to changes in Uzbekistan’s sovereign rating, potential bank privatization, or a reduction of the capital buffer below regulatory minimums. An upgrade could occur with an improved operating environment and strengthened financial performance.

Short-term ratings were affirmed at ‘B’. The xgs ratings, which exclude extraordinary state support, align with the VR and remain sensitive to changes in the long-term IDR and VR.