Tashkent, Uzbekistan (UzDaily.uz) — International rating agency Fitch Ratings has upgraded Ipak Yuli Bank’s Long-Term Issuer Default Ratings (IDRs) in foreign and local currency to B+ from B. The outlook on the ratings is Stable. The bank’s Viability Rating (VR) was also upgraded to b+ from b, Fitch Ratings said.
The upgrades reflect improvements in the operating environment for Uzbek banks, acceptable asset quality and capitalisation, strong profitability and adequate liquidity buffers.
Fitch revised its assessment of the operating environment for Uzbek banks from b+/Positive to b+/Stable. The agency noted progress in banking reforms over the past two years, including stronger regulation and efforts to address accumulated risks.
Stable business conditions and economic growth of 8.5% year-on-year in the first half of 2026, according to Fitch, should support the further development of banks and contribute to higher profits and capital over the medium term.
Ipak Yuli remains a small private bank in Uzbekistan’s concentrated banking system. At the end of the first half of 2026, it accounted for 3% of total banking-sector assets.
Corporate loans and lending to small and medium-sized businesses accounted for 79% of the bank’s gross loan portfolio. The bank is also expanding its retail lending business.
Ipak Yuli’s loan growth averaged 26% annually in 2023–2025, exceeding the sector average of 21%. Fitch expects lending to continue growing in 2026, driven mainly by small and medium-sized businesses and retail lending. Foreign-currency loans accounted for 49% of the portfolio at the end of the first half of 2026, compared with 39% for the banking sector as a whole.
The share of Stage 3 impaired loans fell from 3.7% at the end of 2024 to 2.9% of the gross loan portfolio at the end of 2025. These loans were 80% covered by credit-loss reserves. The share of Stage 2 loans remained elevated at 8.7%. Fitch expects the share of impaired loans to remain below 5% in 2026–2027.
In 2025, the bank’s net interest margin was 8.8%, while profit before impairment charges was equivalent to 6% of average loans.
Operating profit reached 3.5% of risk-weighted assets, compared with 4.1% a year earlier. Fitch expects operating profitability to remain resilient in 2026–2027, although below the 2025 level due to an expected increase in loan impairment charges.
Ipak Yuli’s Fitch Core Capital ratio rose from 14.1% at the end of 2024 to 15.2% at the end of 2025. The regulatory Tier 1 capital ratio reached 15.6% at the end of the first half of 2026, up from 14.1% at the end of 2025 and significantly above the regulatory minimum of 10%.
Wholesale funding accounted for 37% of the bank’s total liabilities at the end of 2025, mainly consisting of long-term funding from international financial institutions. Highly liquid assets represented 37% of the bank’s assets and included cash, short-term interbank placements and investments in debt securities, primarily Uzbek government bonds.
Fitch said a downgrade could follow if Ipak Yuli’s FCC ratio falls sustainably below 12%, asset quality deteriorates, impairment charges increase significantly, risk-weighted assets grow rapidly, or funding becomes unstable or liquidity outflows occur.
An upgrade would require an improvement in Fitch’s assessment of the operating environment for Uzbek banks and a reduction in Ipak Yuli’s risk appetite while maintaining adequate profitability and capitalisation.
