Tashkent, Uzbekistan (UzDaily.uz) — International rating agency Fitch Ratings has affirmed the Long-Term Issuer Default Ratings (IDRs) of Universal Bank JSC in foreign and local currency at B-. The Outlook remains Stable.
Fitch also affirmed Universal Bank’s Viability Rating (VR) at b-.
According to the agency, the bank’s rating reflects its standalone creditworthiness. At the same time, the assessment is constrained by its limited market position, small share of Uzbekistan’s banking sector, rapid loan growth and high concentration of its loan portfolio.
Positive factors identified by Fitch include a low share of impaired loans, high profitability and adequate capital and liquidity buffers.
The bank’s Viability Rating is one notch below the implied level of b due to a business profile adjustment. Fitch links the adjustment to Universal Bank’s small scale in domestic and international markets, as well as corporate governance risks, including a lack of transparency in its ownership structure and potential related-party lending risks.
Operating environment
Fitch revised its assessment of the operating environment for Uzbekistan’s banks from b with a Positive Outlook to b+ with a Stable Outlook. The agency said this reflects progress in banking reforms, including stronger regulation and the elimination of accumulated risks.
Combined with stable business conditions, the improved operating environment should support the resilience of banks’ credit profiles. Fitch also noted Uzbekistan’s economic growth of 8.5% year on year in the first half of 2026.
Market position and loan portfolio
Universal Bank remains a small participant in Uzbekistan’s banking market. At the end of the first half of 2026, it accounted for less than 1% of the banking sector’s assets.
The bank operates mainly in the Ferghana region and focuses on financing small and medium-sized businesses, unsecured retail lending and settlement and transaction services.
Short-term loans to finance working capital account for the bulk of lending. The share of foreign-currency loans increased to 31% at the end of the first half of 2026 from 23% at the end of 2025. Fitch noted that some foreign-currency loans were extended to borrowers focused on the domestic market and without foreign-currency revenues.
Related-party lending remains volatile. At the end of 2025, it accounted for 2.5% of the loan portfolio, down from 10% a year earlier.
Asset quality and profitability
According to Fitch, Universal Bank’s share of Stage 3 impaired loans under IFRS stood at 1% of the gross loan portfolio at the end of 2025. This amount was fully covered by general loan-loss reserves.
Stage 2 loans accounted for 2%. Fitch expects the share of impaired loans to remain broadly stable in 2026, with improvements in the quality of part of the portfolio offset by the emergence of new problem loans.
Fee income plays a significant role in the bank’s earnings. It accounted for 51% of operating income in the first half of 2026.
The ratio of operating profit to risk-weighted assets (RWA) increased to 6.7% in 2025 from 5.1% in 2024. Fitch forecasts that the ratio will remain at around 6% in 2026–2027.
Capital and resilience
Fitch’s core capital ratio for Universal Bank increased to 18% at the end of 2025 from 16.8% a year earlier. The increase was supported by strong profitability and moderate dividend payments.
As of the end of the first half of 2026, the bank’s Tier 1 capital adequacy ratio and total capital adequacy ratio stood at 14% and 17.1%, respectively. This provided a buffer above the regulatory minimums of 10% and 12%.
Fitch expects internal capital generation to continue supporting the bank’s capitalization, taking into account growth in risk-weighted assets and moderate dividend payments.
