Fitch Affirms Ipak Yuli Bank’s ‘B’ Rating with a Positive Outlook

Tashkent, Uzbekistan (UzDaily.com) — Fitch Ratings has affirmed the Long-Term Issuer Default Rating (IDR) of Ipak Yuli Bank at ‘B’ with a Positive Outlook, the agency reported. The bank’s Viability Rating (VR) was also affirmed at ‘b’.

According to Fitch, the rating reflects Ipak Yuli’s standalone credit profile, considering its modest scale, high balance-sheet dollarization, potential credit portfolio vulnerabilities, and reliance on wholesale funding. At the same time, the bank demonstrates strong profitability, as well as adequate capitalization and liquidity.

Ipak Yuli remains a mid-sized player in Uzbekistan’s banking sector, accounting for 2.8% of total assets. The bank focuses mainly on corporate and SME lending (75% of the loan book) while gradually expanding retail lending. About 31% of shares are held by international financial institutions, enhancing investor confidence.

Fitch noted that the Positive Outlook reflects expectations of a favorable economic environment in Uzbekistan, which should allow the bank to strengthen its business profile, maintain stable internal capital generation, and ensure sustainable funding.

Asset quality is assessed as moderate: Stage 3 loans (IFRS 9) declined to 3.2% at the end of the first half of 2025 and were fully covered by reserves. Fitch forecasts that this ratio will remain below 5% through 2025–2026.

The bank demonstrates strong profitability, driven by high-yield products, with operating profitability reaching 3.9% of risk-weighted assets in the first half of 2025.

Capitalization remains solid: Core Capital improved to 14.9%, and Tier 1 to 13.2%, both above the regulatory minimum.

Liquidity is assessed as adequate, with around 31% of assets held in highly liquid instruments, covering a significant portion of customer deposits.

Fitch highlighted that negative rating pressure could arise from a deterioration in asset quality, higher credit losses, or a decline in the Core Capital ratio below 12%.

An upgrade may be possible if operating conditions improve and the bank maintains its strong financial profile.