Fitch Confirms TBC Uzbekistan Ratings at “BB-”; Outlook Negative

Tashkent, Uzbekistan (UzDaily.com) — Fitch Ratings has confirmed the long-term issuer default ratings (IDR) of Uzbek JSC “TBC Bank” (TBCU) in both foreign and local currency at “BB-” with a negative outlook. The bank’s Viability Rating (VR) remains at “b.”

Fitch emphasized that the ratings reflect potential support from the parent bank, TBC BANK JSC (Georgia, rating BB/Negative), the primary entity of the TBC BANK Group PLC. Any emergency support is expected to come from the parent company. The bank’s Shareholder Support Rating (SSR) is one notch below the parent’s IDR and is assessed at “bb-,” indicating the moderate role of the Uzbek subsidiary within the group and significant reputational risk for TBC in the event of default.

The agency noted a substantial improvement in Uzbekistan’s operating environment in recent years, forecasting continued enhancements in regulation, corporate governance, and sustainable economic growth, which should support TBCU’s business development and profitability.

TBCU remains a relatively small market participant—around 2% of banking sector assets at the end of H1 2025—but is actively expanding. The bank is a leader in unsecured consumer lending (17% of the sector) and is gradually broadening its offerings to small and medium-sized enterprises to diversify its revenue model.

Fitch highlighted TBCU’s rapid loan portfolio growth, which led to increased provisions for potential losses in H1 2025. The credit portfolio more than doubled in 2024, with non-performing loans remaining low at 2.2%, though growth is expected in 2025–2026 as the portfolio matures. The bank continues to build reserves prudently to cover potential losses.

TBCU reached break-even in 2023, and in 2024 its return on risk-weighted assets (ROAA) was 3.2%. Fitch expects profitability to continue in 2025–2026, though performance will remain sensitive to risk costs and operational efficiency.

The bank’s capitalization remains adequate: Fitch Core Capital (FCC) was 20.8% at the end of 2024. However, with continued loan portfolio growth, Fitch expects it to decline below 15% over the next two years, which is considered comfortable given the bank’s risk profile.

TBCU is primarily funded through client deposits (53% of liabilities at the end of H1 2025), mainly retail deposits, although their cost is high. The bank has also raised significant borrowed funds, with external financing expected to increase over the medium term. The loan-to-deposit ratio reached 180% (end of 2024: 162%), and liquidity remains moderate, with sensitivity to funding costs.

Fitch notes that TBCU’s IDR and SSR could be downgraded in line with the parent company’s rating. VR may fall if the credit profile deteriorates or capitalization drops substantially (FCC below 10%) without timely capital injections.

Rating upgrades would only be possible after strengthening the business franchise, successfully transitioning to a diversified model, maintaining asset quality, and achieving consistently high profitability.