Moody’s assigns Apex Bank B3 rating with stable outlook
Tashkent, Uzbekistan (UzDaily.uz) — Moody’s Ratings has assigned JSC Apex Bank long-term deposit and issuer ratings in local and foreign currencies at B3, with a stable outlook. The bank’s baseline credit assessment (BCA) and adjusted BCA were set at b3, according to Moody’s Ratings’ rating action.
Apex Bank’s long-term counterparty risk assessment (CR Assessment) was set at B2(cr), while its long-term counterparty risk ratings in local and foreign currencies were assigned B2. The bank’s short-term deposit and issuer ratings, as well as short-term counterparty risk ratings, were assigned Not Prime (NP), while its short-term counterparty risk assessment was set at NP(cr).
According to Moody’s, Apex Bank’s B3 deposit and issuer ratings are based on its b3 BCA and the low likelihood of government support. The agency attributes this to the bank’s small size and private ownership within Uzbekistan’s banking sector, where the sovereign rating is Ba2 with a stable outlook.
The b3 BCA reflects Apex Bank’s position within a broader group of affiliated companies, which provides synergies, as well as ongoing support from shareholders and related companies. Moody’s specifically highlights JSC Apex Insurance, one of Uzbekistan’s largest insurance companies.
The agency expects Apex Bank to leverage established customer relationships and the capabilities of affiliated companies as its customer base expands. At the same time, the bank’s credit profile is constrained by its short operating history as a standalone institution, high borrower concentration and rapid loan-book growth, which puts pressure on capitalization.
At the end of 2025, non-performing loans accounted for 0.9% of the gross loan portfolio. Moody’s noted that the ratio remains low, but said that the bank’s short operating history and predominantly young loan portfolio mean that the figure does not yet fully reflect the level of credit risks. The agency expects the share of non-performing loans to gradually increase as the portfolio matures. High loan concentration among individual borrowers and related parties remains an additional risk factor.
Apex Bank’s tangible common equity to risk-weighted assets (TCE/RWA) ratio was about 6.2% at the end of 2025. The ratio was negatively affected by the bank’s high volume of intangible assets. At the same time, capital adequacy ratios exceeded regulatory requirements.
Moody’s forecasts a moderate improvement in Apex Bank’s capitalization over the next 12–18 months, supported by full profit retention and continued shareholder support. However, the effect will be partly offset by further balance-sheet growth.
The bank’s return on tangible assets was 0.7% in 2025. According to the agency, profitability is constrained by the developing business model and significant reliance on income from transactions with related parties. As the bank expands its operations and diversifies its customer base, this dependence is expected to decline.
At the same time, elevated operating expenses related to investments in infrastructure and operating capacity are expected to affect financial results in the near term. Moody’s also expects the cost of credit risk to gradually increase as the loan portfolio matures.
Apex Bank’s core banking liquidity stood at 24.4% of total banking assets at the end of 2025. It consisted mainly of cash, balances held with financial institutions and government securities. Moody’s expects the liquidity buffer to decline as the loan portfolio continues to grow.
The bank is primarily funded by deposits, although its deposit base remains highly concentrated among large corporate depositors and related parties.
The BCA also incorporates a one-notch negative qualitative adjustment for strategy, risk appetite and corporate governance. Moody’s links the adjustment to the bank’s rapid balance-sheet growth from a small starting base, limited standalone operating experience and continued reliance on related parties for lending, funding and income generation.
According to the agency, Apex Bank’s management intends to gradually diversify its customer base and business model. However, the sustainability of the bank’s operations outside the group ecosystem has yet to be demonstrated, and the related risks are not yet fully reflected in its financial metrics.
These factors are also reflected in the assessment of environmental, social and governance factors. Apex Bank’s corporate governance profile was assigned a G-4 assessment, while its credit impact score for ESG factors was set at CIS-4. According to Moody’s, CIS-4 indicates a substantial impact of ESG factors on the bank’s rating, primarily due to high corporate governance risks.
Moody’s does not expect government support to provide an uplift to Apex Bank’s deposit and issuer ratings. This reflects the bank’s predominantly private ownership and small market share, which, according to the agency, indicate that the bank has limited significance for the stability of the banking sector as a whole.
The stable outlook assumes that Apex Bank’s credit profile will remain broadly unchanged over the next 12–18 months. Support from shareholders and affiliated companies, along with continued business development, should provide support. At the same time, risks related to rapid growth, high borrower concentration and significant transactions with related parties are expected to remain.
A downgrade or a change in the outlook to negative could occur if rapid business expansion leads to a significant deterioration in asset quality and capitalization. A similar scenario could arise if the bank fails to successfully expand its customer base and reduce its reliance on transactions with related parties.
According to Moody’s, an upgrade could become possible if Apex Bank develops a longer operating track record while maintaining high asset quality, significantly reducing concentration among individual borrowers and related parties, strengthening capitalization, and establishing a sustainable and more diversified income structure.
