Fitch Affirms Ipoteka-Bank Ratings at “BB” with Stable Outlook

Tashkent, Uzbekistan (UzDaily.com) — Fitch Ratings has affirmed the long-term issuer default ratings (IDR) of JSC Ipoteka-Bank in both foreign and local currency at “BB” with a stable outlook. The agency also confirmed the Support Rating (SSR) at “bb” and the Viability Rating (VR) at “b.”

According to Fitch, the bank’s long-term ratings are underpinned by a high likelihood of support from Hungary’s OTP Bank Plc, which holds a controlling stake in Ipoteka-Bank. At the same time, the ratings are capped by Uzbekistan’s sovereign ceiling (“BB”), reflecting transfer and convertibility risks.

Analysts note improvements in Uzbekistan’s operating environment, including a strengthened banking system, enhanced regulatory quality, and better corporate governance, all of which provide a foundation for sustainable growth.

Ipoteka-Bank ranks sixth in the country’s banking sector and remains a leader in mortgage lending, holding a 22% market share as of the first half of 2025. Since joining the OTP Group in June 2023, the bank has strengthened its risk management framework and improved the quality of new loans.

Despite a rise in non-performing loans to 21% at the end of 2024 (up from 19% a year earlier), Fitch expects this ratio to decline to 15% in 2025–2026.

The bank’s financial results demonstrate recovery: in 2024, it posted a net profit of 1.3 trillion soms (ROAE — 23%) after a loss in 2023. The Fitch Core Capital ratio increased to 12% at the end of 2024 and is expected to exceed 14% in 2025–2026.

The primary source of funding remains state resources (43% of liabilities), although the share of private-sector deposits is growing. Fitch assesses the bank’s liquidity as adequate, at 22% of assets.

Factors that could lead to a downgrade include a potential lowering of Uzbekistan’s sovereign ceiling or a weakening in OTP’s willingness or ability to provide support. Potential drivers for an upgrade include an increase in the sovereign ceiling, capital strengthening, successful resolution of problem assets, and sustained profitability growth.